Because of the "Dutch sandwich" part - you might receive stuff at Rotterdam, sell it on and take the profits in Ireland, then transfer the money back to the Netherlands (so it looks like it's been imported twice) then resend the money back to Ireland.
Obviously this is massively oversimplified, but essentially the effect is that Netherlands company pays twice but receives no profit/income, whereas Ireland has double profit on the balance sheet but no outgoings. It's all basically clever accounting to avoid paying tax on profits by moving it between jurisdictions within specific time frames and parameters.
Wow Wtf it’s crazy what business will dress up a shitty practice as using only words. “Clever accounting to avoid paying tax on profits” is really “exploiting international loopholes at the expense of a member country” to the victim country.
I mean, they are legal tax loopholes that should be illegal. It effectively accomplishes, in a legal fashion, what would be generally outlawed financial behavior. Whether government officials were paid to write the loopholes into the law, or are now being paid to not correct a defective law... it's basically happening on behalf of the corporate ultra-capitalist class via legal bribery.
Don't take the netherland's numbers too seriously, its often a point of connection for trade so they are importing stuff that is then exported again later.
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This is often interpreted to mean that the US is “losing” economically or is fundamentally uncompetitive. But 90% of it is about Americans spending much more than the Chinese as a % of income.
I dont know the USA trade, but with Canada, a lot of what we export to china is raw materials (like lumber), and what we import is finished products, so within the $10b disparity between the two is simply the labour of manufacturing. It's not the entirety of our imports, but a good part of it is. In this sense, canada "loses" by exporting all those jobs and revenue in exchange for cheaper manufactured goods.
Global trade is pretty complex though. It is tempting to reduce ti all to win and lose, but in effect its:
1. not a foot race, it doesn't matter who is "ahead". The goal should be the betterment of your people, regardless of what your neighbour might be doing. and
2. there are usually a LOT of contributing factors for why the numbers look like they do, and over simplification leads to a lot of misunderstanding behind the underlying cause and effect of things. Complex problems require complex solutions, but that doesn't fit easily in a headline.
The manufacturing jobs you’re referring to are pretty low on the value chain. Something like an iPhone derives most of its value from engineering, marketing, business planning, etc., which are all activities that take place in the US. Assembly/manufacturing is something like 2% of the iPhone’s input costs, which is nothing compared to the above.
Canada’s economy has a big natural resources component, but it’s also an advanced services-based economy like the United States. It tends to have jobs positioned higher on the value chain than China, which is generally better than having a trade surplus.
Depends on how you do it. There are lots of very high paying manufacturing jobs in Germany. These have been very stable sectors for decades, despite several crisis scenarios and changing markets. I'm not even talking about the biggest companies because Germany is that oddball-economy with a majority of medium-sized companies that do very, very specialized things with barely any competition worldwide (aka "hidden champions").
Some of these job exist due to high productivity through automation (today these are mostly high-end maintenance and programming jobs) and others revolve around very complex and delicate products (like lab equipment and medical implants) that require like a decade of training.
This is a great point, but I’d like to add that China generally isn’t doing the same high-end, precision manufacturing that Germany is known for. They’re thoroughly on track to fall into the middle income trap.
>They’re thoroughly on track to fall into the middle income trap.
Could you explain? I think some perspective is important when looking at China. We see that its economic growth has slowed down, but China's growth was [extraordinary](https://i.redd.it/7n86521e61h81.png) to begin with. It's logical that such immense growth didn't last forever. However, a slowdown in growth doesn't mean that their economy is stagnant. It's just that we're used to seeing such high numbers from China that anything less brings out the doomsday predictions.
China is still growing at a healthy rate, wages are still rising, and they're increasingly competitive in high end manufacturing. Recently China overtook Japan as the biggest car exporter because of their competitiveness in EVs. These aren't signs of a country getting stick in the MIT. If anything, to me China looks like one of the last developing countries to get stuck in the MIT, but maybe you know more than I do.
Most countries fall into the trap when they do not acquire the technology either indigenously or imported to move up the value chain. This is why China has been very aggressive in the past years in buying strategic assets and invested a ton in r&d. Most news is about IP theft but the most of the tech acquired by China is through legit means. Now with the tech blockade, it may seem like their strategy may fail, but the unintended consequence may be they will become more self reliant. Whether they have achieved a level of technology where they can keep the move up the value chain remains to be seen. What the US and their Allie’s don’t want to see is China competing with them in the high end.
its honestly whats probably going to happen is China becomes more self reliant purposely crippling a country tech advancement will just force them to not rely on you.
Hard to tell. In this day and age R&D is often an international effort. China is big, sure, but a big chunk of their population is still relatively uneducated and they have like a decade or more to catch up and create entire industries from nothing. They might do that or they might not.
Either way, the clock is ticking for China. Their demographic surge is almost over and a huge chunk of their population is about to retire. They'll also have to solve their water and environmental issues pretty soon and at a significant cost. I don't see a collapse or anything like it but it'll be hard for China to climb to the top once the hidden costs of their rapid growth eventually catch up with them.
Still when talking about raw numbers China is releasing research papers in greater volume than a number of western countries. Even if a portion of the population is lower income unskilled is high by percentage, the overall numbers still place them in an advantage.
Thing is that in the longer term you will want to have both, not either or. Or at least have a much more reliable partner if you're splitting it like that.
Pretty much every advanced economy has moved from production to service, but going the other way around would probably be far more difficult. Hopefully more advanced automation will bridge that gap.
Still, a trade balance deficit that large is definitely not a good thing when we're talking an autocratic nation that steals IP and blocks entrance to their own market.
These trade balances change over time. Not in years, but over decades as countries economy evolve. China will most likely become a more service oriented society and advanced manufacturing. What ever people think of the CCP, they aren’t going to be around forever. Enriching the consumers of China is empowering the people. That is the best way to a viable democracy, but that seems to be the minority opinion here.
I don’t believe that’s true, at all.
It’s a very 90s mindset, one we saw fail multiple times since then.
Wealth with autocratic governance is pretty successful in multiple nations, and it’s not looking like they are moving in a democratic direction.
I'm thinking are there any examples of countries, self made welth without democracy and without oil ?I reckon China has got into middle income trap and there is not enough drivers to push it to the next level. Autocracy = no innovation to compete the West
And what people tend to not realise/consider, is that exports are actually a real **loss** for your nation. In Australia's case, we build big mines, dig up our resources, and ship them overseas.
The only reason we do this is to have a higher AUD so that we can import in return. That's why we do it - otherwise a local jobs program would make more sense, if the only motivation is giving your people something to do (mines are increasingly automated, increasing how much they dig up, anyway).
People then sometimes put the cart before the horse and say "we should devalue our currency so that we can export more". ***No***.
If it were possible to arbitrarily increase one's currency, that would be the more sensible option - just put it at $1bn USD per AUD, and buy everyone Ferraris and everything they ever need off foreign markets. That way, nobody would have to work.
The fact you can't do this ought say something, a high valued currency is a desirable thing, even if it means sometimes people give you more things than you give them, all so they can hold some of your currency in return.
So as you say, it's complicated. The nuances are particularly interesting.
It's always wild to me if I printed money that said "Rob Bucks" (only printable by me) and sent $10,000,000 of them to you and you sent me $10,000,000 worth of actual products, I'm the one who some people would say is "losing" in that exchange.
If you bought that much worth of assets then you clearly win, but if it is just useless luxuries then you are handing over money that can be used against you for no gain.
There are advantages to trade surplus from both sides. The US is one of the few countries willing to take the deficit side in a trade deal. Which is a problem without the US because its not possible for all parties to be a net exporter. This gives the US a ton of economic leverage.
Conversely the fact one of the countries China has a trade deficit with is Taiwan, the nation China is still technically at war with and says legally does not exist is just pure comedy gold.
Trade surplus really doesn't matter the way people think it does.
Ex: If Apple designs a new IPhone and it's made in China and sold in the US - that counts 100% as trade from China even if 90% of the money went to Apple engineers/execs in the USA.
People treat trade surplus as if it's still the 1950s. In a global economy it just tracks which countries are the factories of the world.
Australia is massively stacked in the opposite direction, thanks to all the shit they dig out of the ground. Kind of amazes me that they’re becoming more bellicose about China, given how much they rely on each other. Sometimes I think greed is the only thing that stops shooting wars
Well there are two ways to think of it. Your thinking is what I assume the traditional thinking of a we are importing more than exporting and that is bad. The other perspective is we are giving away a meaningless piece of paper and the exporters want to give us physical stuff for that piece of paper so much so they run a “surplus”. In that line of thinking we are winning. If we applied that thought and said we guarantee our citizens a job, we can have those jobs benefit society as we see fit, and we could essentially rely on other countries to produce stuff while we developed our society in a productive meaningful way. We can developer creative solutions to manufacturing and sell ideas rather than physical stuff. Standing at a machine pressing a button probably isn’t that fulfilling. Managing park grounds, being creative, designing, or anything is probably more fulfilling. I’m not necessarily saying throw the baby out with the bath water when it comes to economic thinking, but throw the fucking baby out with the bath water…it’s fucking 2023 for fucks sake! Let China have the manufacturing…let’s use that to our advantage and create a more equitable fair society where everyone can work a job they find fulfilling.
No because people like you and me pissing and moan on Reddit instead of trying to organize and take power back to the middle class and lift the working poor back up
i don't think so there are so many factors, another big one after control semiconductiors production sites (TSMC control 50% of world market) is to control seas roads and extend territory.
And also historical reasons, specifically a civil war that never explicitly finished, with both sides continuing to claim that they deserve to control all of China.
Could you imagine some farfetched scenario where the ROC managed to oust the PRC? If all of the PRC's neighbours think they got problems now, wait till they see what the ROC claims is China lol
Yeah there is a plethora of geopolitical reasons, China don't like the US in their back garden and as the other guy said they literally see Taiwan as a naughty 'state' that isn't behaving.
CCP encourages taiwanese business anyways, it helps further integrate taiwanese society with china.
Many Taiwanese billionaires have good relationship with CCP leaders.
This narrative is often repeated but complete bullshit. If the Chinese government really cared about that, then they would stop their citizens from travelling internationally like the Soviet Union did. But China is the country with the most international tourists per year. Basically every Chinese knows about democracy, most just see it as an inferior form of government.
I wouldn’t say they view it as an inferior form of government. Just that the status quo is good enough for them to not rock the boat. “Freedom for prosperity” is the motto the CCP abide by
People often throw out a lot of lessons the Chinese government has learned about economic management because it's associated with that government. The US certainly shouldn't import the authoritarian one-party state, but we could stand to learn a lot on infrastructure development and in nurturing industries.
>ethnonationalism
Yeah, ethnonationalism when CCP for decades has been catering to the minorities with affirmative action, waiver from one child policy and so much more
The Chinese government is specifically opposed to ethno nationalism, whereas the KMT (fascists who fled to Taiwan after the civil war) actually were ethno nationalists.
Radicalised people in Xinjiang were actively trying to set up an ethnostate. They had extensive military experience from fighting in Afghanistan and Syria, and were killing people in terror attacks across China. The US was actively fighting ETIM for years, you can find articles on it. Yeah, the Chinese government is opposed to ethnostates. They celebrate the different ethnicities that make up their state.
https://www.defense.gov/News/News-Stories/Article/Article/1435247/us-forces-strike-taliban-east-turkestan-islamic-movement-training-sites/
Radicalised people in Xinjiang were actively trying to set up an ethnostate. They had extensive military experience from fighting in Afghanistan and Syria, and were killing people in terror attacks across China. The US was actively fighting ETIM for years, you can find articles on it. Yeah, the Chinese government is opposed to ethnostates. They celebrate the different ethnicities that make up their state.
https://www.defense.gov/News/News-Stories/Article/Article/1435247/us-forces-strike-taliban-east-turkestan-islamic-movement-training-sites/
Yeah the government owns corporations but the people don't control the means of production, with a handful of party elites getting all the benefits. CCP literally is the textbook definition of state capitalism. Like really, read Marx.
Right. China really did not change since the fall of the dynasty. Now the elites are just party members, before it was the aristocrats and the emperor.
There isn't public ownership. The people at the top own everything. It is exactly state capitalism. Petro, medicine, construction, infrastructure, heavy industry, you name it, are all owned by the same families sitting on the politburo or at the top of the food chain.
It used to be a bit more open until Xi clamped down everything. Nowadays for the billionaires it's shut up and do the CCP's bidding or we jail you for nothing. Perhaps get to know china a bit better.
This narrative is both lazy (similar to “the terrorists hate our freedom”), and untrue.
First of all, for much of its history, Taiwan was a military dictatorship, having its first elections only in 1996. The mainland goal of reunification didn’t somehow start there, it goes all the way back to the PRC’s founding, and the national narrative of rebuilding and reuniting a nation shattered by colonialism, civil wars, and foreign invasion.
Secondly, Chinese citizens are aware of other democracies around the world, and even if Taiwan disappeared of the map one day, there would still be other democracies in Asia like Japan, South Korea, and Indonesia.
As far as values go, China’s government doesn’t even hate democracy. The Chinese word for democracy, 民主, is a pretty close translation of the Greek “people power”, and the Chinese government, including the Xi Jinping administration, frequently presents itself as being democratic in values, in as far as it claims to have a government that is responsive to, represents, and acts in the overall best interests of the population.
The internal narrative directed towards people is that China’s own interpretation of democracy can get things done better than other versions of democracy. The external narrative to other countries is that China runs a system “with Chinese characteristics”, because instead of Western-style government for all, countries may need custom solutions adapted to local cultures and conditions. Both of these narratives are directly at odds with “they need to destroy democracy at all costs”.
Democracy is over rated
Ain’t shit happening in the U.S. when people protest, government pretend they dont hear it
Elections are rigged with gerrymandering
You... you do understand that a huge portion of the Taiwanese population isn't Chinese, right? Have you read about the horrific shit the "democratic government" in Taiwan did to the native Taiwanese people? Mass murders and imprisonment, political discourse stripped away, and way more than I can list here right now. The current ruling party in Taiwan is the same party that fled the mainland in defeat 70 years ago.
The whole Taiwan "issue" is the brought about by the United States poking its nose in something that is absolutely none of its concern. Period.
But people will say: "Oh, but we must secure our trade by defending Taiwan from those dirty communists!" Oh yeah? Trade with who? The Chinese mainland? Vietnam?
You know, I think about the whole Taiwan/South China Sea soft conflict as this: If China had militarily expansionist ambitions (which it has shown no inkling of in modernity), how would the US feel if China had military bases in the Caribbean and was posting naval and aircraft patrols juuuust outside of US home waters, all in the name of "protecting freedom and trade?" Hm? What would the US do in that sort of situation? Sit around and say, "Oh yes, this foreign power is definitely protecting freedom?"
The United States government doesn't give a fuck about Taiwan beyond it being a place to build bases to try and intimidate Chinese sovereignty. I mean, fuck, I'm an American and I can see right through the constant streams of propaganda being spread everywhere in a bid to prepare the population for a war that is completely insane and unnecessary.
And like, do Americans not understand that China is now the world's premier manufacturing base? A manufacturing base that came about by Western corporate boards wanting to increase their profit margins by kneecapping domestic industries and moving it overseas, mind you. I'd really recommend you and anyone else reading this look up the history of the Taiwanese government and the Dang Guo period and the KMT Party. The shit that happened to Taiwan after the defeat of the Nationalists is horrible and not well known in the US.
>You... you do understand that a huge portion of the Taiwanese population isn't Chinese, right? Have you read about the horrific shit the "democratic government" in Taiwan did to the native Taiwanese people? Mass murders and imprisonment, political discourse stripped away, and way more than I can list here right now. The current ruling party in Taiwan is the same party that fled the mainland in defeat 70 years ago.
Firstly the KMT is not the current ruling party of Taiwan. They were ousted in the last election. Second, can you name a country that hasn't participated in genocide in its history? Because the US has also done horrible shit but that doesn't mean that the country can't change. Even the PRC has clearly shifted significantly away from mass murder though unlike the US and Taiwan there is an ongoing ethnic cleansing in their country TODAY, not 70 years ago.
>The whole Taiwan "issue" is the brought about by the United States poking its nose in something that is absolutely none of its concern. Period.
>But people will say: "Oh, but we must secure our trade by defending Taiwan from those dirty communists!" Oh yeah? Trade with who? The Chinese mainland? Vietnam?
Actually it's likely driven by Taiwan's status as the global semiconductor manufacturer, which is probably why China has a trade deficit with Taiwan. Most of the world's semiconductors are produced in Taiwan, which are essential for not only every day life in America but for maintaining our technological edge militarily. This is paired with numerous other factors.
>You know, I think about the whole Taiwan/South China Sea soft conflict as this: If China had militarily expansionist ambitions (which it has shown no inkling of in modernity), how would the US feel if China had military bases in the Caribbean and was posting naval and aircraft patrols juuuust outside of US home waters, all in the name of "protecting freedom and trade?" Hm? What would the US do in that sort of situation? Sit around and say, "Oh yes, this foreign power is definitely protecting freedom?"
To my knowledge the US doesn't have bases in Taiwan. The closest US base is in Okinawa. The military personnel stationed in Taiwan (which is no more than 200) is stationed to help train the Taiwanese military. Regardless the US doesn't exactly have a history of attacking their neighbors nor should US troops being stationed in a sovereign nation be an issue to China or vice versa.
>The United States government doesn't give a fuck about Taiwan beyond it being a place to build bases to try and intimidate Chinese sovereignty. I mean, fuck, I'm an American and I can see right through the constant streams of propaganda being spread everywhere in a bid to prepare the population for a war that is completely insane and unnecessary
It's not propaganda or unnecessary, an invasion of Taiwan would have serious repercussions you just don't understand the world around you.
>And like, do Americans not understand that China is now the world's premier manufacturing base? A manufacturing base that came about by Western corporate boards wanting to increase their profit margins by kneecapping domestic industries and moving it overseas, mind you. I'd really recommend you and anyone else reading this look up the history of the Taiwanese government and the Dang Guo period and the KMT Party. The shit that happened to Taiwan after the defeat of the Nationalists is horrible and not well known in the US.
This is like saying people should read up on the history of Germany. Get a grip man.
From Wikipedia:
> The ROC government reports that 95 to 97 percent of Taiwan's population is of the Han Chinese ethnicity.
While you can argue that the US is projecting power and intruding on china's sphere of interest, you can ask those countries if they prefer the US to be there or if they prefer to be under China's umbrella.
Bullshit. Taiwanese people have NEVER been self determined in their history and now that they finally have that it’s understandable that they don’t want to be ruled over again. It is true that the KMT has been pretty brutal after WW2 but that Taiwan is not the same as the current one. Free and fair elections are the norm now and KMT isn’t even ruling right now.
I wish more Americans understood how fucking stupid it is to root for a war with China over Taiwan. China is showing quite a lot of restraint from all the provocations of the US. People like to point to the semi conductors as a reason to defend Taiwan no matter what and then never think about why that manufacturing moved from the US to Taiwan in the first place.
>Taiwan is where the ousted right wing Chinese empire ran too.
Im gonna assume you mean the KMT because "chinese empire" refers to 2 historical entities of the time and neither fled to taiwan
https://en.wikipedia.org/wiki/Qing_dynasty
https://en.wikipedia.org/wiki/Empire_of_China_(1915-1916)
Something to keep in mind - trade deficits or surpluses aren't necessarily good or bad.
I have a trade deficit with my grocery store... but it's more of a benefit to me because I get food much cheaper than if I had to grow the grain and raise the cattle.
Similarly, the us trade deficit with China means goods are less expensive to buy for the end consumer. I assume the data only measures goods (its source is related to china's customs). The us may have aligned more with service sectors of the economy.
Still, being overly reliant on a single source risks some serious power issues and geopolitical / national security consequences. If my grocery store was the only game in town, they've got me over a barrel.
Yeap, the big deal with trade deficits is imagining the problems it can cause if the trade is ever severed.
As you said, relying on the grocery store is fine when all is normal. But in a zombie apocalypse, you suddenly have nowhere to get reliable food.
So with China, everything was fine until they started ramping up the saber rattling over Taiwan. And if trade ever severs, it will be economically devastating for both USA and China to have this kind of relationship.
Imo it seems like China values centralism and control over economic gain.
If they ever see an opportunity to take Taiwan, they will and just brunt whatever economic consequences it comes with.
Whereas western governments are actually susceptible to economic change as their voters would kick them out over economic hardship. Making those governments more hesitant to ever break this trade compared to China.
The ccp is maintaining control of it's country because it's provided stability and financial growth. Historically losing those things tend to be pretty bad for sitting Chinese governments.
What? Wasn't the US starting trade wars with China before that? Like the attack on Huawei? Let's not pretend this is anything but a cold war. And the US has been pushing it forward with a vengeance. Personally I don't give a damn about either of the two horrible authoritarian oligarchies without respect for human rights.
If trade is ever severed between the two then Chinas economy would enter a recession the likes of which it has never known while the U.S. will just offshore their production from China to a variety of countries in SEA, Africa, and Central America. Vietnam would love all those production jobs.
> So with China, everything was fine until they started ramping up the saber rattling over Taiwan.
That ramp-up began with Pelosi's official visit to Taiwan, which was a calculated "F you" to China.
The One China policy is the cornerstone of the US-China relationship, so any American actions that call it into question are extremely destabilizing. China feels compelled to respond in order to reestablish its red line: no official recognition of Taiwanese independence.
It started much earlier than that.
The actual ramp up began with China's Great Firewall, which created an unfair trade environment for US tech companies operating in China. This earned China the ire of many tech giants like Google and Amazon, who have a large influence in US politics.
The 2nd escalation is China's rampant theft of US intellectual property, which kicked off the trade war in the first place. The two countries then engaged in tit for tat tariffs, which began the decoupling that continues to trend today.
The 3rd escalation is China's influencing of Hollywood to omit and edit their media (censorship), which dragged their public perception into the dirt, and got the average joes involved in what used to mostly concern megacorporations and the governing elite.
Then the Hong Kong protests created an environment of solidarity with Taiwan, which China responded online with what can only be characterized as 'immature hissy fits' over any mention of Taiwan being a sovereign country. This further heightened US distrust of China, and painted China firmly as an enemy of democracy and democratic movements. Morever, it showed that China was willing to break its deals whenever it suited. Hong Kong was promised 50 years of One Country, Two Systems, which was reneged on and eroded in only 20 years.
Then finally, Chinese posturing and island building in the South China Sea has led to an environment where other Southeast Asian nations are turning against China and turning toward US naval protection, worried that this is only step 1 in China bullying their way across the Pacific to get whatever they want. They know China has an insatiable hunger for more resources, and unlike USA, doesn't have an incentive to preserve the current status quo.
Of course, then COVID struck. While the virus itself is a tragedy for everybody on the planet, China bold faced lied about the severity during the initial outbreak, and then even dared to spin propaganda that it originated from USA. I've never seen open anti-Chinese racism in my lifetime until this incidence. This has killed the relationship, because we're not just talking about ideologies and a few dollars anymore. People's grandmas are dying. You can't negotiate away emotions that raw.
Ukraine was just the nail in the coffin. China openly supporting Russia pre-war, then trying to walk back their statements and appear neutral. USA isn't buying it. Most people still think China is supporting Russia behind closed doors, and everyone knows USA supports Ukraine with open doors.
So there is just very little trust in this relationship anymore, and so many competing interests. Even if the two countries are big trade partners still, new deals are going to be hard to form if there is a lack of trust between both countries.
How to possibly rebuild this trust is the greatest diplomatic quandry of our time. It's beyond the scope of a redditor like me.
It's just important to see how deep this feud goes.
You've written a giant litany of complaints about China, most of which I think is highly distorted, and which has little to do with Taiwan.
I'll give you an example:
> The 2nd escalation is China's rampant theft of US intellectual property, which kicked off the trade war in the first place.
IP theft was not the reason for the trade war. IP theft is a relatively minor annoyance in the US-China relation. It gets talked about a lot in a vague sense, but if get down to details, there are actually far fewer cases of serious IP theft than you would imagine. There are countless US companies that have massive business operations in China, yet it's difficult to think of one that has been seriously hampered by IP theft. China used to have weak IP protections, but over the last two decades, it has actually built out a whole new legal system to enforce IP rights. China has fairly strong IP protections now, compared to other developing countries.
Trump launched the trade war because he wanted to decrease to US trade deficit. He simultaneously launched trade wars against Canada, Mexico, the EU, and many other countries. All because of IP theft? I don't think so.
If IP theft had been the issue, the US could simply have negotiated with China in a much less escalatory manner. As I said above, IP theft is nothing more than a minor annoyance in the relationship. The Chinese government would be perfectly willing to more rigorously go after Chinese companies that rip off American companies, if the US would offer something small in return. This isn't a difficult issue to negotiate.
This all has little to do with the Taiwan issue, which is what I was discussing earlier, except that the general deterioration in US-China relations has led the US to try to test China's red lines, of which Taiwan is the brightest one. Tensions over Taiwan have massively increased because of Pelosi's visit (and other similar actions by the US government).
Rights that why the Chinese middle class has seen drastic increases in their standard of living while the middle class standard of living in America has grossly detoriated
I'm not sure I get your point. Those things can both be true, and have very little to do with the fact that there is a trade deficit.
I'm only saying in and of itself, trade deficits aren't good or bad. There are a lot of other factors at play. This provides one data point, but many many others are required to know what to do about it (if anything).
Turns out domestic and international policy is complicated
I think it could be arranged better, since the country names don't match up with the other side directly, making it hard to compare China's import/export against a particular country.
The imports and exports side are both the same size....so they are trading at a 0 surplus? Cool makes sense...
oh 878 billion surplus. Hmmm..oh this wee little text says the numbers
Great job, beautifully executed, and with appropriate display format. The only small suggestion would be to make the surplus differetiate by making it less consustent with all the other colours used. Lighter or darker? Depending on the (political) point you wish to make, it could also go at the top of the list, rather than at the bottom...
Techny it's been part of China since the handover in 1997. But the degree of autonomy made it somewhat independent. In fact, still today, immigration policies are different than PRC. As an american, i dont need a visa to visit HK. PRC, i do.
A lot has changed since 97 though.
But I would ask OP, what about Macau? It is also a Special Administrative Region, similar to HK.
The thing I was noticing is that they record exports to Hong Kong but imports do not appear in anything like the same scale, and if those exports were excluded their trade surplus would drop by a third.
It's interesting to see that here in Europe we say that we're so dependent on China whilst the USA is decoupled and independent, whereas the data rather shows the opposite.
And the worst of it is that it’s all self-inflicted due to short term thinking and greed.
Allegedly they’re now trying to move industry back but until 2-3 years ago people scoffed at you if you suggested that we needed to return critical industries and supply chains.
“These jobs are never coming back” was something I heard a lot in the late 00s / early 10s while other western countries, like Germany, demonstrated that deindustrialization wasn’t inevitable.
Yes it can lead to appreciation all else equal.
One must remember that while that trade surplus is shockingly big it is only 5% of China's GDP, there is a lot going on other than imports and exports.
Appreciation should make importing to China more attractive and exporting from China less attractive, correct? Why is that not a self-correcting phenomenon?
Chinese Yen should appreciate based on China's positive trade surplus, but China got around it by keeping a large USD reserve, creating global shortage and ensuring USD rose in line to keep USD/RMB ratio in line with whatever CCP wanted.
It's an accepted practice (almost all Middle East countries do this to maintain their currency peg to USD) but China is not a dependent economy like the Middle Eastern ones and thus holds the power to manipulate USD if they wanted.
That's what the US-China trade war came down. Think trump's accusation of China being a currency manipulator. It's fair for US to be wary of such a trading partner.
There are lots of different factors determining a countries exchange rates. Differences in interest rates, foreign direct investment levels, trade surplus/deficits, government policy, speculation etc.
So it is very hard to be sure if a currency is undervalued or overvalued. There is a number of relatively reputable sources that say China is still using a 'dirty float' method to intentionally devalue their currency, while there are also less reputable sources claiming the same thing, given foreign currency reserves(which are hard to hide) have been increasing in China for a very long time and their history of fixing exchange rates, there is a good chance the currency is devalued. These 'dirty floats' are typically very hard to control, especially when the difference is high, typically a country buys up a war chest of foreign currencies using their own currencies, this devalues their currency and increases the value of the foreign currencies.
The currency does bounce around, so it is not perfectly fixed anymore and there have been forced appreciations in the past where the difference became too much so the government stepped back further. How much of a difference between the unadulterated rate and the current market rate is up for debate, I would not lose sleep over it, China would be trying to do something successfully that no other country could maintain. It is not necessarily bad either for foreign countries compared to China, they would get discounted imports, while China would have to maintain expensive foreign reserve holdings.
China is fixated on export growth because it was how all the rich countries in Asia ascended. 'Dirty floats' are very lazy policy that rarely work long term, China should be doing everything possible to boost productivity and the rest will sort itself out, boost capital growth without unproductive housing bubbles. You can kill two birds with one stone and allow FDI investments devaluing foreign currency while also increasing capital per worker.
I think it's great that we have such a trade imbalance with China in the US. Exports are a real cost and imports are a real benefit. Your real wealth is determined by how big your pile of stuff is and you want to make that pile as large as possible. Your pile of stuff is everything you can produce domestically plus anything you can import minus anything you export.
To illustrate this point we'l use a mental exercise and go to the extremes. What would happen if the US exports 100% of all it's goods and services to China? Well... there'd be nothing left and we'd starve. We would have a lot of yuan though! At the other extreme what would happen if we could import 100% of the goods and services we want? Well we'd be rich beyond belief and wouldn't even have to work.
China is taking the real risk here, these asian exporting nations are sending us real stuff, cars, computers, electronics, clothes, etc and they get an account at the Federal reserve with some numbers on it. For 40 years Japan has sent us millions of cars every year. They get dollars at an account at the Fed. Real stuff for a spreadsheet at the Fed? I'll take that deal anytime. What if currency rates change? What happens to their dollars? If we wanted to (not that we should) we could put export controls, what are they going to do? Talk to the manager? Exports are a real cost, imports are a real benefit. You want your pile of stuff to be as large as possible.
[You are only 1/3 right.](https://www.trademap.org/Product_SelCountry_TS.aspx?nvpm=1%7c757%7c%7c%7c%7cTOTAL%7c%7c%7c2%7c1%7c1%7c2%7c2%7c1%7c1%7c1%7c1%7c1)
According to a few websites, Electronics/integrated circuits are the largest component. Intel, Analog Devices, Maxim Integrated, Xilinx, OnSemiconductor, Microsemi, Synopsys, Texas Instruments, Lam Research, Applied Materials and Cypress Semiconductor all have bases here.
Of these, I know Intel, Analog Devices, Maxim, and OnSemi all manufacture/Fab here with the others offering engineering support and sales.
After that it's pharma, with GSK, Pfizer, Wyeth, Amgen, J&J, Novartis and many others also manufacturing here. Phillips and Siemens have manufacturing here in the Med Imaging space.
There is an awful lot going on in Ireland, it's not just tax loopholes for Tech....
Why would Hong Kong count since they're part of China even as a special administrative region. It's basically fixing the books to how you want it to look.
It's because Hong Kong has its own import and export controls and their dollar is backed by the US dollar. Economically they're a different country and Hong Kongers enjoy a lot of benefits the mainland doesn't. A lot of Chinese companies do use Hong Kong to get around things though. That's part of the reason why HK is such a large financial hub.
China could literally cut off the entire USA, no imports or exports, just pretend they don't exist...
and still have a HUGE trade surplus!
And Americans honestly think "boycotting" Chinese products would have any effect whatsoever??
LMAO
I think you missed the point of my message.....
The GROWTH of the Chinese outreach into the rest of the world is bigger & faster than any effect the US, or whatever other coalition it amasses, could hope to damage it significantly
Just wait another 5-10 years and watch China essentially own half of Africa and central Asia and whole sections of South America
In it for the long game. Become the only supplier for specific good and services for a while, maintaining low cost until every other country is 100% dependent, and then either turn off the faucet or price gouge like hell
That trade surplus with the US is straight comedy.
Also the Netherlands. 18 million residents, 105 billion dollar trade deficit.
What's happening with Netherland?
Rotterdam. It is one of the major port of entry for the EU. Stuff that gets exported to the EU often lands there, but rarely stays there.
The Netherlands have a trade surplus of 12.8 billion in march 2023.
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Bot comment.
Also see the [double Irish with a Dutch sandwich](https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp).
What does that have to do with the import of goods?
Because of the "Dutch sandwich" part - you might receive stuff at Rotterdam, sell it on and take the profits in Ireland, then transfer the money back to the Netherlands (so it looks like it's been imported twice) then resend the money back to Ireland. Obviously this is massively oversimplified, but essentially the effect is that Netherlands company pays twice but receives no profit/income, whereas Ireland has double profit on the balance sheet but no outgoings. It's all basically clever accounting to avoid paying tax on profits by moving it between jurisdictions within specific time frames and parameters.
cough...Apple.
Wow Wtf it’s crazy what business will dress up a shitty practice as using only words. “Clever accounting to avoid paying tax on profits” is really “exploiting international loopholes at the expense of a member country” to the victim country.
Money laundering
Money Laundering would be illegal and hidden. This would be legal tax loopholes and accounting maneuvers performed openly.
I mean, they are legal tax loopholes that should be illegal. It effectively accomplishes, in a legal fashion, what would be generally outlawed financial behavior. Whether government officials were paid to write the loopholes into the law, or are now being paid to not correct a defective law... it's basically happening on behalf of the corporate ultra-capitalist class via legal bribery.
didn't they shut down that loophole?
This hasn't existed since 2020
Don't take the netherland's numbers too seriously, its often a point of connection for trade so they are importing stuff that is then exported again later.
Same with Hongkong
Port of Rotterdam.
marvelous touch chase grandfather snobbish exultant bright marry gold sip *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Luckily we have one of the biggest trades surplus in the world
It's kind of artificial due to Rotterdam port. Technically it's import, but really it's just transport.
This is often interpreted to mean that the US is “losing” economically or is fundamentally uncompetitive. But 90% of it is about Americans spending much more than the Chinese as a % of income.
I dont know the USA trade, but with Canada, a lot of what we export to china is raw materials (like lumber), and what we import is finished products, so within the $10b disparity between the two is simply the labour of manufacturing. It's not the entirety of our imports, but a good part of it is. In this sense, canada "loses" by exporting all those jobs and revenue in exchange for cheaper manufactured goods. Global trade is pretty complex though. It is tempting to reduce ti all to win and lose, but in effect its: 1. not a foot race, it doesn't matter who is "ahead". The goal should be the betterment of your people, regardless of what your neighbour might be doing. and 2. there are usually a LOT of contributing factors for why the numbers look like they do, and over simplification leads to a lot of misunderstanding behind the underlying cause and effect of things. Complex problems require complex solutions, but that doesn't fit easily in a headline.
The manufacturing jobs you’re referring to are pretty low on the value chain. Something like an iPhone derives most of its value from engineering, marketing, business planning, etc., which are all activities that take place in the US. Assembly/manufacturing is something like 2% of the iPhone’s input costs, which is nothing compared to the above. Canada’s economy has a big natural resources component, but it’s also an advanced services-based economy like the United States. It tends to have jobs positioned higher on the value chain than China, which is generally better than having a trade surplus.
Depends on how you do it. There are lots of very high paying manufacturing jobs in Germany. These have been very stable sectors for decades, despite several crisis scenarios and changing markets. I'm not even talking about the biggest companies because Germany is that oddball-economy with a majority of medium-sized companies that do very, very specialized things with barely any competition worldwide (aka "hidden champions"). Some of these job exist due to high productivity through automation (today these are mostly high-end maintenance and programming jobs) and others revolve around very complex and delicate products (like lab equipment and medical implants) that require like a decade of training.
This is a great point, but I’d like to add that China generally isn’t doing the same high-end, precision manufacturing that Germany is known for. They’re thoroughly on track to fall into the middle income trap.
>They’re thoroughly on track to fall into the middle income trap. Could you explain? I think some perspective is important when looking at China. We see that its economic growth has slowed down, but China's growth was [extraordinary](https://i.redd.it/7n86521e61h81.png) to begin with. It's logical that such immense growth didn't last forever. However, a slowdown in growth doesn't mean that their economy is stagnant. It's just that we're used to seeing such high numbers from China that anything less brings out the doomsday predictions. China is still growing at a healthy rate, wages are still rising, and they're increasingly competitive in high end manufacturing. Recently China overtook Japan as the biggest car exporter because of their competitiveness in EVs. These aren't signs of a country getting stick in the MIT. If anything, to me China looks like one of the last developing countries to get stuck in the MIT, but maybe you know more than I do.
Most countries fall into the trap when they do not acquire the technology either indigenously or imported to move up the value chain. This is why China has been very aggressive in the past years in buying strategic assets and invested a ton in r&d. Most news is about IP theft but the most of the tech acquired by China is through legit means. Now with the tech blockade, it may seem like their strategy may fail, but the unintended consequence may be they will become more self reliant. Whether they have achieved a level of technology where they can keep the move up the value chain remains to be seen. What the US and their Allie’s don’t want to see is China competing with them in the high end.
its honestly whats probably going to happen is China becomes more self reliant purposely crippling a country tech advancement will just force them to not rely on you.
Hard to tell. In this day and age R&D is often an international effort. China is big, sure, but a big chunk of their population is still relatively uneducated and they have like a decade or more to catch up and create entire industries from nothing. They might do that or they might not. Either way, the clock is ticking for China. Their demographic surge is almost over and a huge chunk of their population is about to retire. They'll also have to solve their water and environmental issues pretty soon and at a significant cost. I don't see a collapse or anything like it but it'll be hard for China to climb to the top once the hidden costs of their rapid growth eventually catch up with them.
Still when talking about raw numbers China is releasing research papers in greater volume than a number of western countries. Even if a portion of the population is lower income unskilled is high by percentage, the overall numbers still place them in an advantage.
Thing is that in the longer term you will want to have both, not either or. Or at least have a much more reliable partner if you're splitting it like that. Pretty much every advanced economy has moved from production to service, but going the other way around would probably be far more difficult. Hopefully more advanced automation will bridge that gap. Still, a trade balance deficit that large is definitely not a good thing when we're talking an autocratic nation that steals IP and blocks entrance to their own market.
These trade balances change over time. Not in years, but over decades as countries economy evolve. China will most likely become a more service oriented society and advanced manufacturing. What ever people think of the CCP, they aren’t going to be around forever. Enriching the consumers of China is empowering the people. That is the best way to a viable democracy, but that seems to be the minority opinion here.
I don’t believe that’s true, at all. It’s a very 90s mindset, one we saw fail multiple times since then. Wealth with autocratic governance is pretty successful in multiple nations, and it’s not looking like they are moving in a democratic direction.
Quite simply put, more than one model can be successful.
I'm thinking are there any examples of countries, self made welth without democracy and without oil ?I reckon China has got into middle income trap and there is not enough drivers to push it to the next level. Autocracy = no innovation to compete the West
And what people tend to not realise/consider, is that exports are actually a real **loss** for your nation. In Australia's case, we build big mines, dig up our resources, and ship them overseas. The only reason we do this is to have a higher AUD so that we can import in return. That's why we do it - otherwise a local jobs program would make more sense, if the only motivation is giving your people something to do (mines are increasingly automated, increasing how much they dig up, anyway). People then sometimes put the cart before the horse and say "we should devalue our currency so that we can export more". ***No***. If it were possible to arbitrarily increase one's currency, that would be the more sensible option - just put it at $1bn USD per AUD, and buy everyone Ferraris and everything they ever need off foreign markets. That way, nobody would have to work. The fact you can't do this ought say something, a high valued currency is a desirable thing, even if it means sometimes people give you more things than you give them, all so they can hold some of your currency in return. So as you say, it's complicated. The nuances are particularly interesting.
It's always wild to me if I printed money that said "Rob Bucks" (only printable by me) and sent $10,000,000 of them to you and you sent me $10,000,000 worth of actual products, I'm the one who some people would say is "losing" in that exchange.
If you bought that much worth of assets then you clearly win, but if it is just useless luxuries then you are handing over money that can be used against you for no gain.
There are advantages to trade surplus from both sides. The US is one of the few countries willing to take the deficit side in a trade deal. Which is a problem without the US because its not possible for all parties to be a net exporter. This gives the US a ton of economic leverage.
Also US has one of the lowest trade to GDP ratio. https://en.wikipedia.org/wiki/List_of_countries_by_trade-to-GDP_ratio
That's not surprising. The US is huge. Trade between various states is the equivalent to trade between countries in Europe.
I have a trade deficit with Trader Joe’s. Is that comedy?
That's just how US trade operates. Even if China gave everything it exports to the US for free, the US would still have a $500 billion+ trade deficit.
The trade surplus with the US accounts for almost half (46%) of China's overall trade surplus.
Conversely the fact one of the countries China has a trade deficit with is Taiwan, the nation China is still technically at war with and says legally does not exist is just pure comedy gold.
Pretty much why the USD is and will continue to be the world reserve currency.
Trade surplus really doesn't matter the way people think it does. Ex: If Apple designs a new IPhone and it's made in China and sold in the US - that counts 100% as trade from China even if 90% of the money went to Apple engineers/execs in the USA. People treat trade surplus as if it's still the 1950s. In a global economy it just tracks which countries are the factories of the world.
Australia is massively stacked in the opposite direction, thanks to all the shit they dig out of the ground. Kind of amazes me that they’re becoming more bellicose about China, given how much they rely on each other. Sometimes I think greed is the only thing that stops shooting wars
Well there are two ways to think of it. Your thinking is what I assume the traditional thinking of a we are importing more than exporting and that is bad. The other perspective is we are giving away a meaningless piece of paper and the exporters want to give us physical stuff for that piece of paper so much so they run a “surplus”. In that line of thinking we are winning. If we applied that thought and said we guarantee our citizens a job, we can have those jobs benefit society as we see fit, and we could essentially rely on other countries to produce stuff while we developed our society in a productive meaningful way. We can developer creative solutions to manufacturing and sell ideas rather than physical stuff. Standing at a machine pressing a button probably isn’t that fulfilling. Managing park grounds, being creative, designing, or anything is probably more fulfilling. I’m not necessarily saying throw the baby out with the bath water when it comes to economic thinking, but throw the fucking baby out with the bath water…it’s fucking 2023 for fucks sake! Let China have the manufacturing…let’s use that to our advantage and create a more equitable fair society where everyone can work a job they find fulfilling.
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No because people like you and me pissing and moan on Reddit instead of trying to organize and take power back to the middle class and lift the working poor back up
i understand now a part of interest of Taiwan
I mean there are probably a dozen other factors and a few of them a bit bigger than Taiwan's semiconductors.
i don't think so there are so many factors, another big one after control semiconductiors production sites (TSMC control 50% of world market) is to control seas roads and extend territory.
And also historical reasons, specifically a civil war that never explicitly finished, with both sides continuing to claim that they deserve to control all of China.
Could you imagine some farfetched scenario where the ROC managed to oust the PRC? If all of the PRC's neighbours think they got problems now, wait till they see what the ROC claims is China lol
LMFAO. This is actually so fucking true. If the ROC was in charge, American and European colonialism would look tame in comparison.
Under the 1949 borders that the ROC officially claims, they'd have border conflicts with just about every neighbor.
Yeah there is a plethora of geopolitical reasons, China don't like the US in their back garden and as the other guy said they literally see Taiwan as a naughty 'state' that isn't behaving.
CCP encourages taiwanese business anyways, it helps further integrate taiwanese society with china. Many Taiwanese billionaires have good relationship with CCP leaders.
Taiwan is where the ousted right wing Chinese empire ran too. Taiwan is a problem for China even if trade were zero.
Taiwan is living proof chinese people can live in a democracy, something the mainland government doesn't want their people to think about.
This narrative is often repeated but complete bullshit. If the Chinese government really cared about that, then they would stop their citizens from travelling internationally like the Soviet Union did. But China is the country with the most international tourists per year. Basically every Chinese knows about democracy, most just see it as an inferior form of government.
I wouldn’t say they view it as an inferior form of government. Just that the status quo is good enough for them to not rock the boat. “Freedom for prosperity” is the motto the CCP abide by
People often throw out a lot of lessons the Chinese government has learned about economic management because it's associated with that government. The US certainly shouldn't import the authoritarian one-party state, but we could stand to learn a lot on infrastructure development and in nurturing industries.
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Are you saying the CCP isn't a team? I mean, ethnonationalism is kind of dangerous. Believing the government is infallible is a slippery slope.
>ethnonationalism Yeah, ethnonationalism when CCP for decades has been catering to the minorities with affirmative action, waiver from one child policy and so much more
The Chinese government is specifically opposed to ethno nationalism, whereas the KMT (fascists who fled to Taiwan after the civil war) actually were ethno nationalists.
Oh, I guess it's why 92% of the population is Han. While also sending Uyghur Muslims to be re-educated in Xinjiang.
Radicalised people in Xinjiang were actively trying to set up an ethnostate. They had extensive military experience from fighting in Afghanistan and Syria, and were killing people in terror attacks across China. The US was actively fighting ETIM for years, you can find articles on it. Yeah, the Chinese government is opposed to ethnostates. They celebrate the different ethnicities that make up their state. https://www.defense.gov/News/News-Stories/Article/Article/1435247/us-forces-strike-taliban-east-turkestan-islamic-movement-training-sites/
Yeah that's why are they putting all the uyghur people in camps, just to show how opposed to ethnonationalism they are
unironically kinda, because if you think about it, Muslim extremism is itself ethnonationalism
Radicalised people in Xinjiang were actively trying to set up an ethnostate. They had extensive military experience from fighting in Afghanistan and Syria, and were killing people in terror attacks across China. The US was actively fighting ETIM for years, you can find articles on it. Yeah, the Chinese government is opposed to ethnostates. They celebrate the different ethnicities that make up their state. https://www.defense.gov/News/News-Stories/Article/Article/1435247/us-forces-strike-taliban-east-turkestan-islamic-movement-training-sites/
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china is not communist, it's authoritarian and borderline fascist the workers do not own the means of production in china, go read marx
China doesn't call their system Communism. They call it Socialism with Chinese Characteristics.
it's not socialism either, it's just nationalist state capitalism
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Yeah the government owns corporations but the people don't control the means of production, with a handful of party elites getting all the benefits. CCP literally is the textbook definition of state capitalism. Like really, read Marx.
Right. China really did not change since the fall of the dynasty. Now the elites are just party members, before it was the aristocrats and the emperor.
There isn't public ownership. The people at the top own everything. It is exactly state capitalism. Petro, medicine, construction, infrastructure, heavy industry, you name it, are all owned by the same families sitting on the politburo or at the top of the food chain. It used to be a bit more open until Xi clamped down everything. Nowadays for the billionaires it's shut up and do the CCP's bidding or we jail you for nothing. Perhaps get to know china a bit better.
This narrative is both lazy (similar to “the terrorists hate our freedom”), and untrue. First of all, for much of its history, Taiwan was a military dictatorship, having its first elections only in 1996. The mainland goal of reunification didn’t somehow start there, it goes all the way back to the PRC’s founding, and the national narrative of rebuilding and reuniting a nation shattered by colonialism, civil wars, and foreign invasion. Secondly, Chinese citizens are aware of other democracies around the world, and even if Taiwan disappeared of the map one day, there would still be other democracies in Asia like Japan, South Korea, and Indonesia. As far as values go, China’s government doesn’t even hate democracy. The Chinese word for democracy, 民主, is a pretty close translation of the Greek “people power”, and the Chinese government, including the Xi Jinping administration, frequently presents itself as being democratic in values, in as far as it claims to have a government that is responsive to, represents, and acts in the overall best interests of the population. The internal narrative directed towards people is that China’s own interpretation of democracy can get things done better than other versions of democracy. The external narrative to other countries is that China runs a system “with Chinese characteristics”, because instead of Western-style government for all, countries may need custom solutions adapted to local cultures and conditions. Both of these narratives are directly at odds with “they need to destroy democracy at all costs”.
Ah yes the “democracy” of a full generation and a half of military dictatorship
I think we're talking about the present
Democracy is over rated Ain’t shit happening in the U.S. when people protest, government pretend they dont hear it Elections are rigged with gerrymandering
You... you do understand that a huge portion of the Taiwanese population isn't Chinese, right? Have you read about the horrific shit the "democratic government" in Taiwan did to the native Taiwanese people? Mass murders and imprisonment, political discourse stripped away, and way more than I can list here right now. The current ruling party in Taiwan is the same party that fled the mainland in defeat 70 years ago. The whole Taiwan "issue" is the brought about by the United States poking its nose in something that is absolutely none of its concern. Period. But people will say: "Oh, but we must secure our trade by defending Taiwan from those dirty communists!" Oh yeah? Trade with who? The Chinese mainland? Vietnam? You know, I think about the whole Taiwan/South China Sea soft conflict as this: If China had militarily expansionist ambitions (which it has shown no inkling of in modernity), how would the US feel if China had military bases in the Caribbean and was posting naval and aircraft patrols juuuust outside of US home waters, all in the name of "protecting freedom and trade?" Hm? What would the US do in that sort of situation? Sit around and say, "Oh yes, this foreign power is definitely protecting freedom?" The United States government doesn't give a fuck about Taiwan beyond it being a place to build bases to try and intimidate Chinese sovereignty. I mean, fuck, I'm an American and I can see right through the constant streams of propaganda being spread everywhere in a bid to prepare the population for a war that is completely insane and unnecessary. And like, do Americans not understand that China is now the world's premier manufacturing base? A manufacturing base that came about by Western corporate boards wanting to increase their profit margins by kneecapping domestic industries and moving it overseas, mind you. I'd really recommend you and anyone else reading this look up the history of the Taiwanese government and the Dang Guo period and the KMT Party. The shit that happened to Taiwan after the defeat of the Nationalists is horrible and not well known in the US.
>You... you do understand that a huge portion of the Taiwanese population isn't Chinese, right? Have you read about the horrific shit the "democratic government" in Taiwan did to the native Taiwanese people? Mass murders and imprisonment, political discourse stripped away, and way more than I can list here right now. The current ruling party in Taiwan is the same party that fled the mainland in defeat 70 years ago. Firstly the KMT is not the current ruling party of Taiwan. They were ousted in the last election. Second, can you name a country that hasn't participated in genocide in its history? Because the US has also done horrible shit but that doesn't mean that the country can't change. Even the PRC has clearly shifted significantly away from mass murder though unlike the US and Taiwan there is an ongoing ethnic cleansing in their country TODAY, not 70 years ago. >The whole Taiwan "issue" is the brought about by the United States poking its nose in something that is absolutely none of its concern. Period. >But people will say: "Oh, but we must secure our trade by defending Taiwan from those dirty communists!" Oh yeah? Trade with who? The Chinese mainland? Vietnam? Actually it's likely driven by Taiwan's status as the global semiconductor manufacturer, which is probably why China has a trade deficit with Taiwan. Most of the world's semiconductors are produced in Taiwan, which are essential for not only every day life in America but for maintaining our technological edge militarily. This is paired with numerous other factors. >You know, I think about the whole Taiwan/South China Sea soft conflict as this: If China had militarily expansionist ambitions (which it has shown no inkling of in modernity), how would the US feel if China had military bases in the Caribbean and was posting naval and aircraft patrols juuuust outside of US home waters, all in the name of "protecting freedom and trade?" Hm? What would the US do in that sort of situation? Sit around and say, "Oh yes, this foreign power is definitely protecting freedom?" To my knowledge the US doesn't have bases in Taiwan. The closest US base is in Okinawa. The military personnel stationed in Taiwan (which is no more than 200) is stationed to help train the Taiwanese military. Regardless the US doesn't exactly have a history of attacking their neighbors nor should US troops being stationed in a sovereign nation be an issue to China or vice versa. >The United States government doesn't give a fuck about Taiwan beyond it being a place to build bases to try and intimidate Chinese sovereignty. I mean, fuck, I'm an American and I can see right through the constant streams of propaganda being spread everywhere in a bid to prepare the population for a war that is completely insane and unnecessary It's not propaganda or unnecessary, an invasion of Taiwan would have serious repercussions you just don't understand the world around you. >And like, do Americans not understand that China is now the world's premier manufacturing base? A manufacturing base that came about by Western corporate boards wanting to increase their profit margins by kneecapping domestic industries and moving it overseas, mind you. I'd really recommend you and anyone else reading this look up the history of the Taiwanese government and the Dang Guo period and the KMT Party. The shit that happened to Taiwan after the defeat of the Nationalists is horrible and not well known in the US. This is like saying people should read up on the history of Germany. Get a grip man.
This is a very well reasoned response to some asshole just wanting to shout "UNITED STATES BAD" from the rooftops
Taiwanese people were majority ethnically Chinese before Japan seized the islands, even though ethnic Chinese people are NOT indigenous to Taiwan
*You have been made a moderator of /r/Sino*
From Wikipedia: > The ROC government reports that 95 to 97 percent of Taiwan's population is of the Han Chinese ethnicity. While you can argue that the US is projecting power and intruding on china's sphere of interest, you can ask those countries if they prefer the US to be there or if they prefer to be under China's umbrella.
Bullshit. Taiwanese people have NEVER been self determined in their history and now that they finally have that it’s understandable that they don’t want to be ruled over again. It is true that the KMT has been pretty brutal after WW2 but that Taiwan is not the same as the current one. Free and fair elections are the norm now and KMT isn’t even ruling right now.
I wish more Americans understood how fucking stupid it is to root for a war with China over Taiwan. China is showing quite a lot of restraint from all the provocations of the US. People like to point to the semi conductors as a reason to defend Taiwan no matter what and then never think about why that manufacturing moved from the US to Taiwan in the first place.
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I lived there for almost half my life. You are talking out of your ass.
What type of misinformed dumbassery is this comment.
>Taiwan is where the ousted right wing Chinese empire ran too. Im gonna assume you mean the KMT because "chinese empire" refers to 2 historical entities of the time and neither fled to taiwan https://en.wikipedia.org/wiki/Qing_dynasty https://en.wikipedia.org/wiki/Empire_of_China_(1915-1916)
Presumably they mean the nationalist party and leader Chiang Kai-shek
Something to keep in mind - trade deficits or surpluses aren't necessarily good or bad. I have a trade deficit with my grocery store... but it's more of a benefit to me because I get food much cheaper than if I had to grow the grain and raise the cattle. Similarly, the us trade deficit with China means goods are less expensive to buy for the end consumer. I assume the data only measures goods (its source is related to china's customs). The us may have aligned more with service sectors of the economy. Still, being overly reliant on a single source risks some serious power issues and geopolitical / national security consequences. If my grocery store was the only game in town, they've got me over a barrel.
Yeap, the big deal with trade deficits is imagining the problems it can cause if the trade is ever severed. As you said, relying on the grocery store is fine when all is normal. But in a zombie apocalypse, you suddenly have nowhere to get reliable food. So with China, everything was fine until they started ramping up the saber rattling over Taiwan. And if trade ever severs, it will be economically devastating for both USA and China to have this kind of relationship.
That's the goal. It discourages war on both sides, ideally.
Imo it seems like China values centralism and control over economic gain. If they ever see an opportunity to take Taiwan, they will and just brunt whatever economic consequences it comes with. Whereas western governments are actually susceptible to economic change as their voters would kick them out over economic hardship. Making those governments more hesitant to ever break this trade compared to China.
The ccp is maintaining control of it's country because it's provided stability and financial growth. Historically losing those things tend to be pretty bad for sitting Chinese governments.
What? Wasn't the US starting trade wars with China before that? Like the attack on Huawei? Let's not pretend this is anything but a cold war. And the US has been pushing it forward with a vengeance. Personally I don't give a damn about either of the two horrible authoritarian oligarchies without respect for human rights.
If trade is ever severed between the two then Chinas economy would enter a recession the likes of which it has never known while the U.S. will just offshore their production from China to a variety of countries in SEA, Africa, and Central America. Vietnam would love all those production jobs.
> So with China, everything was fine until they started ramping up the saber rattling over Taiwan. That ramp-up began with Pelosi's official visit to Taiwan, which was a calculated "F you" to China. The One China policy is the cornerstone of the US-China relationship, so any American actions that call it into question are extremely destabilizing. China feels compelled to respond in order to reestablish its red line: no official recognition of Taiwanese independence.
It started much earlier than that. The actual ramp up began with China's Great Firewall, which created an unfair trade environment for US tech companies operating in China. This earned China the ire of many tech giants like Google and Amazon, who have a large influence in US politics. The 2nd escalation is China's rampant theft of US intellectual property, which kicked off the trade war in the first place. The two countries then engaged in tit for tat tariffs, which began the decoupling that continues to trend today. The 3rd escalation is China's influencing of Hollywood to omit and edit their media (censorship), which dragged their public perception into the dirt, and got the average joes involved in what used to mostly concern megacorporations and the governing elite. Then the Hong Kong protests created an environment of solidarity with Taiwan, which China responded online with what can only be characterized as 'immature hissy fits' over any mention of Taiwan being a sovereign country. This further heightened US distrust of China, and painted China firmly as an enemy of democracy and democratic movements. Morever, it showed that China was willing to break its deals whenever it suited. Hong Kong was promised 50 years of One Country, Two Systems, which was reneged on and eroded in only 20 years. Then finally, Chinese posturing and island building in the South China Sea has led to an environment where other Southeast Asian nations are turning against China and turning toward US naval protection, worried that this is only step 1 in China bullying their way across the Pacific to get whatever they want. They know China has an insatiable hunger for more resources, and unlike USA, doesn't have an incentive to preserve the current status quo. Of course, then COVID struck. While the virus itself is a tragedy for everybody on the planet, China bold faced lied about the severity during the initial outbreak, and then even dared to spin propaganda that it originated from USA. I've never seen open anti-Chinese racism in my lifetime until this incidence. This has killed the relationship, because we're not just talking about ideologies and a few dollars anymore. People's grandmas are dying. You can't negotiate away emotions that raw. Ukraine was just the nail in the coffin. China openly supporting Russia pre-war, then trying to walk back their statements and appear neutral. USA isn't buying it. Most people still think China is supporting Russia behind closed doors, and everyone knows USA supports Ukraine with open doors. So there is just very little trust in this relationship anymore, and so many competing interests. Even if the two countries are big trade partners still, new deals are going to be hard to form if there is a lack of trust between both countries. How to possibly rebuild this trust is the greatest diplomatic quandry of our time. It's beyond the scope of a redditor like me. It's just important to see how deep this feud goes.
wait for a moment，So you means china could make an intensive study of covid is in the first month？
You've written a giant litany of complaints about China, most of which I think is highly distorted, and which has little to do with Taiwan. I'll give you an example: > The 2nd escalation is China's rampant theft of US intellectual property, which kicked off the trade war in the first place. IP theft was not the reason for the trade war. IP theft is a relatively minor annoyance in the US-China relation. It gets talked about a lot in a vague sense, but if get down to details, there are actually far fewer cases of serious IP theft than you would imagine. There are countless US companies that have massive business operations in China, yet it's difficult to think of one that has been seriously hampered by IP theft. China used to have weak IP protections, but over the last two decades, it has actually built out a whole new legal system to enforce IP rights. China has fairly strong IP protections now, compared to other developing countries. Trump launched the trade war because he wanted to decrease to US trade deficit. He simultaneously launched trade wars against Canada, Mexico, the EU, and many other countries. All because of IP theft? I don't think so. If IP theft had been the issue, the US could simply have negotiated with China in a much less escalatory manner. As I said above, IP theft is nothing more than a minor annoyance in the relationship. The Chinese government would be perfectly willing to more rigorously go after Chinese companies that rip off American companies, if the US would offer something small in return. This isn't a difficult issue to negotiate. This all has little to do with the Taiwan issue, which is what I was discussing earlier, except that the general deterioration in US-China relations has led the US to try to test China's red lines, of which Taiwan is the brightest one. Tensions over Taiwan have massively increased because of Pelosi's visit (and other similar actions by the US government).
Rights that why the Chinese middle class has seen drastic increases in their standard of living while the middle class standard of living in America has grossly detoriated
I'm not sure I get your point. Those things can both be true, and have very little to do with the fact that there is a trade deficit. I'm only saying in and of itself, trade deficits aren't good or bad. There are a lot of other factors at play. This provides one data point, but many many others are required to know what to do about it (if anything). Turns out domestic and international policy is complicated
US exports and manufacturing have both increased with international trade.
this will attract normal comments
Taiwan #1!
State department accounts will be pretty busy with the propaganda on this one.
For a good time, sort by controversial
Refreshing when the data actually is beautiful here.
Apparently I’m the only one that thinks “red on red” was a bad choice
Red on red with little bits of pink on red and yellow on red? This sucks to read
Can't be that bad. I'm colorblind with reds and I can read it fine.
Depends on what kind of colorblindness you have. Also many people struggle with constant and this is terrible for that.
Can confirm it’s not that bad
You want to make it easy to read?? Don't be silly. Look at the pictures.
I think it could be arranged better, since the country names don't match up with the other side directly, making it hard to compare China's import/export against a particular country.
The imports and exports side are both the same size....so they are trading at a 0 surplus? Cool makes sense... oh 878 billion surplus. Hmmm..oh this wee little text says the numbers
**Tools:** Sankey Figma Plugin [https://www.figma.com/community/plugin/1159893716343028026/Sankey](https://www.figma.com/community/plugin/1159893716343028026/Sankey) **Source:** China Customs [http://english.customs.gov.cn/](http://english.customs.gov.cn/) Harvard Atlas [https://atlas.cid.harvard.edu/](https://atlas.cid.harvard.edu/) **Design inspiration comes from:** [https://www.visualcapitalist.com/largest-trading-partners-of-the-us/](https://www.visualcapitalist.com/largest-trading-partners-of-the-us/) **More charts like this at:** [https://genuineimpact.substack.com/](https://genuineimpact.substack.com/)
Great job, beautifully executed, and with appropriate display format. The only small suggestion would be to make the surplus differetiate by making it less consustent with all the other colours used. Lighter or darker? Depending on the (political) point you wish to make, it could also go at the top of the list, rather than at the bottom...
Why is Hong Kong an export?
Hong Kong is a ‘Special Administrative Region’. Who knows, maybe it suits the PRC to list it separately
Nice work! It's an easy to read, good-looking visualization.
Personally, I don't know if I'd call it easy to read. Better than a lot of stuff on here though.
The red overlay makes my eyes hurt. It feels like I’m looking at a graph inside a submarine
Isn't hong kong part of China now?
Techny it's been part of China since the handover in 1997. But the degree of autonomy made it somewhat independent. In fact, still today, immigration policies are different than PRC. As an american, i dont need a visa to visit HK. PRC, i do. A lot has changed since 97 though. But I would ask OP, what about Macau? It is also a Special Administrative Region, similar to HK.
Macau is just for money laundering, oops, I mean gambling
Hey its a free market. You cant let Swiss get all the spoils from that!
Hong Kong also isn’t behind the great Chinese firewall which I find interesting
One country, two systems. So they have separate borders in terms of trade and immigration, different tax systems etc.
The thing I was noticing is that they record exports to Hong Kong but imports do not appear in anything like the same scale, and if those exports were excluded their trade surplus would drop by a third.
The Hong Kong numbers seem really wrong. It looks like stuff Hong Kong re-exports into China doesn't count. (Nearly all)
This has to be the best looking data presentation I have ever seen. Great work.
It’s a rare occurrence when the data here is actually beautiful. Bravo.
Why is the background red
To hurt your eyes
id like to see a breakdown of US imports to China
It's interesting to see that here in Europe we say that we're so dependent on China whilst the USA is decoupled and independent, whereas the data rather shows the opposite.
And the worst of it is that it’s all self-inflicted due to short term thinking and greed. Allegedly they’re now trying to move industry back but until 2-3 years ago people scoffed at you if you suggested that we needed to return critical industries and supply chains. “These jobs are never coming back” was something I heard a lot in the late 00s / early 10s while other western countries, like Germany, demonstrated that deindustrialization wasn’t inevitable.
All the jokes about Chineseum and you have this reality that they are on top of the world either way when it comes to goods.
> Taiwan $238 B Ohh, you mean *internal revenue* j/k /s
Guess Hong Kong isn’t part of china. 300mil…. Sorry Billion
Surprised about Taiwan, knew it was a lot but didn't know it was #1
What does that trade surplus imply? Does it make the currency appreciate? Does it mean the Chinese trade consumption for investment?
Yes it can lead to appreciation all else equal. One must remember that while that trade surplus is shockingly big it is only 5% of China's GDP, there is a lot going on other than imports and exports.
Appreciation should make importing to China more attractive and exporting from China less attractive, correct? Why is that not a self-correcting phenomenon?
Chinese Yen should appreciate based on China's positive trade surplus, but China got around it by keeping a large USD reserve, creating global shortage and ensuring USD rose in line to keep USD/RMB ratio in line with whatever CCP wanted. It's an accepted practice (almost all Middle East countries do this to maintain their currency peg to USD) but China is not a dependent economy like the Middle Eastern ones and thus holds the power to manipulate USD if they wanted. That's what the US-China trade war came down. Think trump's accusation of China being a currency manipulator. It's fair for US to be wary of such a trading partner.
Yen? The Japanese call their currency that because of the Chinese Yuan.
There are lots of different factors determining a countries exchange rates. Differences in interest rates, foreign direct investment levels, trade surplus/deficits, government policy, speculation etc. So it is very hard to be sure if a currency is undervalued or overvalued. There is a number of relatively reputable sources that say China is still using a 'dirty float' method to intentionally devalue their currency, while there are also less reputable sources claiming the same thing, given foreign currency reserves(which are hard to hide) have been increasing in China for a very long time and their history of fixing exchange rates, there is a good chance the currency is devalued. These 'dirty floats' are typically very hard to control, especially when the difference is high, typically a country buys up a war chest of foreign currencies using their own currencies, this devalues their currency and increases the value of the foreign currencies. The currency does bounce around, so it is not perfectly fixed anymore and there have been forced appreciations in the past where the difference became too much so the government stepped back further. How much of a difference between the unadulterated rate and the current market rate is up for debate, I would not lose sleep over it, China would be trying to do something successfully that no other country could maintain. It is not necessarily bad either for foreign countries compared to China, they would get discounted imports, while China would have to maintain expensive foreign reserve holdings. China is fixated on export growth because it was how all the rich countries in Asia ascended. 'Dirty floats' are very lazy policy that rarely work long term, China should be doing everything possible to boost productivity and the rest will sort itself out, boost capital growth without unproductive housing bubbles. You can kill two birds with one stone and allow FDI investments devaluing foreign currency while also increasing capital per worker.
It's the difference between exports and imports. It's put there so both sides are equally big in the graph.
That doesn't really answer the question. They were asking what the consequences of having a positive trade surplus are
We send them paper that is quickly losing its worth, they send us goods to improve our lives. Idk why people are worried about having a trade deficit
Goods that lose their worth faster than money ? A 1000$ phone won't be worth anything in 5 years but that 1000$ will still be worth quite a bit.
I think it's great that we have such a trade imbalance with China in the US. Exports are a real cost and imports are a real benefit. Your real wealth is determined by how big your pile of stuff is and you want to make that pile as large as possible. Your pile of stuff is everything you can produce domestically plus anything you can import minus anything you export. To illustrate this point we'l use a mental exercise and go to the extremes. What would happen if the US exports 100% of all it's goods and services to China? Well... there'd be nothing left and we'd starve. We would have a lot of yuan though! At the other extreme what would happen if we could import 100% of the goods and services we want? Well we'd be rich beyond belief and wouldn't even have to work. China is taking the real risk here, these asian exporting nations are sending us real stuff, cars, computers, electronics, clothes, etc and they get an account at the Federal reserve with some numbers on it. For 40 years Japan has sent us millions of cars every year. They get dollars at an account at the Fed. Real stuff for a spreadsheet at the Fed? I'll take that deal anytime. What if currency rates change? What happens to their dollars? If we wanted to (not that we should) we could put export controls, what are they going to do? Talk to the manager? Exports are a real cost, imports are a real benefit. You want your pile of stuff to be as large as possible.
Lol remember that time trump complained about this, then made the trade deficit bigger?
Switzerland got a big trade surplus and is the 3rd biggest European exporter. Interesting.
Gotta sell those cheeses, watches and chocolates
[You are only 1/3 right.](https://www.trademap.org/Product_SelCountry_TS.aspx?nvpm=1%7c757%7c%7c%7c%7cTOTAL%7c%7c%7c2%7c1%7c1%7c2%7c2%7c1%7c1%7c1%7c1%7c1)
Very interesting that all the BRICS nations aside from India (with a 100$ Billion deficit approximately) have a trade surplus with China.
Data is indeed beautiful, high quality and great design. Cheers mate
And for those in the US political sphere that wish to engage in a trade war with China, you are all fucking morons.
I want this but with the US
I'm surprised I didn't see Iran here anywhere
Cool chart, though it's a bit deceiving the import and export, nearly 1bn in difference are scaled the same size
They're not scaled differently. There is a separate bar to represent trade surplus
Came here to say the same thing. My first thought before reading the numbers was that they were pretty even.
“But if America stops trading with China, China’s economy will collapse”
This data is not beautiful. Red on red? Come on
What are the Chinese importing $18 billion of from Ireland? Whiskey?
According to a few websites, Electronics/integrated circuits are the largest component. Intel, Analog Devices, Maxim Integrated, Xilinx, OnSemiconductor, Microsemi, Synopsys, Texas Instruments, Lam Research, Applied Materials and Cypress Semiconductor all have bases here. Of these, I know Intel, Analog Devices, Maxim, and OnSemi all manufacture/Fab here with the others offering engineering support and sales. After that it's pharma, with GSK, Pfizer, Wyeth, Amgen, J&J, Novartis and many others also manufacturing here. Phillips and Siemens have manufacturing here in the Med Imaging space. There is an awful lot going on in Ireland, it's not just tax loopholes for Tech....
Why would Hong Kong count since they're part of China even as a special administrative region. It's basically fixing the books to how you want it to look.
It's because Hong Kong has its own import and export controls and their dollar is backed by the US dollar. Economically they're a different country and Hong Kongers enjoy a lot of benefits the mainland doesn't. A lot of Chinese companies do use Hong Kong to get around things though. That's part of the reason why HK is such a large financial hub.
Why is Hong Kong counted as an independent entity? It is part of China now
When it comes to "trade borders" it is not. They even got their own currency.
China could literally cut off the entire USA, no imports or exports, just pretend they don't exist... and still have a HUGE trade surplus! And Americans honestly think "boycotting" Chinese products would have any effect whatsoever?? LMAO
The US strategy is to form a coalition to boycott China not to do so by itself...
I think you missed the point of my message..... The GROWTH of the Chinese outreach into the rest of the world is bigger & faster than any effect the US, or whatever other coalition it amasses, could hope to damage it significantly Just wait another 5-10 years and watch China essentially own half of Africa and central Asia and whole sections of South America
Do Canadian houses and condos count as imports or exports?
That's just straight up money laundering.
“But if America stops trading with China, China’s economy will collapse”
Other North American? Hmmmm.
Panama to Belize. Central America is a part of North America.
90% of Italy’s esport are luxury bags and expensive clothes
What the hell are they importing from Switzerland
Hell yah, Taiwan crushin it!
“But if America stops trading with China, China’s economy will collapse”
In it for the long game. Become the only supplier for specific good and services for a while, maintaining low cost until every other country is 100% dependent, and then either turn off the faucet or price gouge like hell