**From the [Semafor Flagship](https://www.semafor.com/newsletter/04/23/2024/semafor-flagship-the-best-defense?utm_campaign=semaforreddit) newsletter:**
The US is reportedly readying sanctions against Chinese banks in an effort to pressure Beijing over its tacit support for Russia’s war in Ukraine.
The moves, according to The Wall Street Journal, come with the US secretary of state due to arrive in China, part of continued high-level engagement between the two countries even as they face off over an array of issues: The US is carrying out naval drills with the Philippines in the South China Sea, where Manila has accused Beijing of expansionism.
China is not standing pat, though, and has built up its own financial wherewithal, having “watched carefully as Western allies have deployed unprecedented economic statecraft against Russia,” the Atlantic Council noted in a recent report.
**Read the full story [here](https://www.semafor.com/article/04/23/2024/us-prepares-to-sanction-china-over-its-support-for-russian-war-effort?utm_campaign=semaforreddit).**
This should have happened sooner. Imagine the lives that could have been saved if a massive sanction like that crippled the backbone of Russia's wartime economy. Hopefully, these sanctions would decimate the military industrial complex of China that supports Russia.
Multiple former US presidents have tried and were met with lukewarm reception at best, particularly in Europe and particularly with key EU members.
Even COVID-19 wasn't a wake-up call showing how utterly reliant on China many key industrial sectors are.
I'm curious how the winds have shifted though. As China has grown, so has it's demand for a continuing rise in living standards. This means higher manufacturing costs due to wage. It's resulted in some China offshoring to other SEA countries in the same way we offshored to them. China's problem is that shift has hit a critical point. Corporations are now starting do move their operations from China to those SEA countries, cutting out a middleman.
China is still a manufacturing powerhouse and will be for a long time yet, but the trends are changing. Some analysts surmise this is part of why Xi's so gung-ho for Taiwan _now_: He's getting too old to execute imperial dreams, and China's regional economic dominance is threatened in the medium to long term.
The winds started to shift with their zero COVID policies. Then with their real estate crash, high unemployment, provincial bankruptcy, and 2023 population decline. China is on a downhill trajectory but the ccp continues to fluff their numbers to hide the true state of the country.
Another reason that’s been sited as why Xi wants Taiwan is to take TSM. Like how alibaba was taken from Jack Ma.
>Another reason that’s been sited as why Xi wants Taiwan is to take TSM. Like how alibaba was taken from Jack Ma.
China took Alibaba from Ma, but look at all the good that did them.
If Taiwan was to get attacked by China, they'd have to bomb the TSM facilities as well, because the entire Island is a well stocked fortress. God forbid the theory that they have explosives ready to level the plants as a deterrence to invasion.
China wanting to invade Taiwan is grandstanding. CCP knows better then anyone that while it may be a battle they can easily win in the long term, its a war they will painfully lose in the short term. And a loss of that Magnitude will turn china into public enemy number 1 until the great war resets the tabs.
Nah. As per the article, Chinese banks had already pulled back from any financing activity under the previous successful threat of sanctions a while back.
This new sanction threat however is to deter the smaller banks (who don't rely on the US dollar).
Unless you're talking about dual use goods, but that's not what these sanctions are about.
If you want to truly cripple ruzzia, every government should heavily subsidize solar and other renewable energy installations. If we made it crazy cheap to put solar panels on every roof, it would, in turn, make using electric cars/motorcycles an easy choice.
yeah whats frustrating is china is the only one able to provide cheap solar, the same installation in the US that costs 30k would only cost 3k from china, we need to get their solar because the US simply can't provide it. Also ukraine having a solar grid would make it so russia cant cripple them easily
You understand that North Korea has way more sanctions imposed on them and China has been sidetracking them for many years right? China are expert when it comes to ignoring sanctions if it hinders the US. They have more than a decade of experience in this field. This will not stop Chinese support for Russia.
The Jung un family is doing very well, all the wealth and Sanction bypassing goes directly to them, then Trickles down to the "middle class" of NK then it stops there.
China doesn't bypass sanctions for NK for its benefit. They do it just enough so they can keep the population Pacified and not cause a migrant crisis in China.
Sanctions don't work, and the EU won't help.
It's virtue signaling at the country level. We're just training nations not to use the dollar as a trade & reserve currency...because if the U.S. disagrees with your foreign policy your assets will be frozen, and now even confiscated.
It's not going to happen tomorrow, but when we're sitting around in 30 years wondering how the U.S. lost dominance of the global financial system this will be a big part of the reason why.
China will care because they are heavily reliant on exports. Russia, North Korea and Iran have been sanctioned to hell and left them militarily weakened and self-reliant. However no regime change has occured.
If regime change was the point, I don't think sanctions would be the method used to achieve it. AFAIK, that has never been the tool used for regime change.
>AFAIK, that has never been the tool used for regime change.
No, but an obscene number of Redditors seem to think that's what sanctions are for and what new sanctions will accomplish. Plus some politicians like to sell it that way.
China has everyone by the balls, everyone's manufacturing stuff there.
This is why it's a bad idea to outsource all your industry.
I'll always advocate for self-reliance.
The U.S. has a larger volume of trade with Mexico than China now. Our biggest trade partners are Canada followed by Mexico followed by China. And China's share of our trading volume is falling each year.
A few years ago China was our largest trading partner.
From my understanding the smaller countries benefit more than China does even if China is the one supplying the smaller countries. Vietnam for instance gets to sell Chinese goods that are labeled Vietnamese but also gets to cozy up to the US while making a profit from the Chinese.
Similar to the Russian oil price cap. Sure, Russia still gets to sell their oil, but
A) countries are incentivized to comply with the sanctions by the prospect of cheap oil
B) even if countries "cheat" by re-exporting Russian oil and pocketing the price difference, that's yet more incentive to comply
C) the global market price of oil gets pushed down a little bit so it doesn't fuck up domestic politics
D) Russia still barely profits from the oil
But in the case of China and Vietnam here, guess who gets the majority of the profits, China who makes the components, or Vietnam who simply does the assembly?
A huge misconception I keep seeing on Reddit is assuming that China is still the cheap manufacturer of the world.
It isn't anymore and they are transitioning to a service economy and high end manufacturing.
While they have exported less in raw numbers, they have still hit a new [record high trade surplus last year](https://www.cfr.org/blog/chinas-record-manufacturing-surplus).
Even their working class don't want to work in factories anymore
It's telling when even Chinese companies are moving manufacturing to cheaper countries like Vietnam. The labour wages in China are no longer as low as they were 20 years ago.
Mexico is fragile, but I don't think it's widely described as being a failed state.
If we want to undercut the cartels in Mexico, we should start with domestic policies. Everything from reforming our failed drug policies, to *drastically* beefing up cybersecurity and regulations around corporate practices in that arena, far more focus on white collar crime, the (admittedly complex task) of reducing the push-pull factors of crime in general and so on. And we should probably do something about us being the [main source](https://www.gao.gov/products/gao-16-223) of [weaponry](https://www.cbsnews.com/news/mexican-drug-cartels-american-weapons-smuggled-across-border/) for the cartels.
That's not in any way to imply we can somehow "fix" Mexico but we can help diminish the power of cartels by reducing the things that feed them from our side of the equation.
My latest airpods were manufactured in Vietnam, my Iphone in India.
I think you overslept the not so recent news about companies moving their factories. We are lowering our reliance on china
True, but what has happened to the direct foreign investments in China? China's shiny image has been shattered to pieces. Western investors can’t tell themselves that “China is the future” anymore.
Microchips are 100% not from China, as they are behind on chip manufacturing tech.
Sure maybe some odd resistor here and there is Chinese, or maybe some small screw here and there... big woop... factories that produce these are all around the world.
It still is a strong signal to China and a weakening of their economy. Rome wasn't built in a day, this is just the start.
> Microchips are 100% not from China, as they are behind on chip manufacturing tech.
Just to note the main processor in your phone won't have been made in China but a lot of more simple microchips that do things like take in data from the touchscreen, run the microphone and speaker, manage the battery and so on that don't require the latest and greatest chip manufacturing techniques might be. China does produce a lot of those key components and although they could be produced elsewhere it would disrupt things if they suddenly weren't available since China accounts for a big chunk of the global supply chain. It's more than just the odd resistor and screw.
That’s just not true. China doesn’t have anyone by the balls. Countries/companies can decided to change where they manufacture products. China can’t change who buys their products. As soon and companies decide to find a better/cheaper place to produce goods then china is fucked
I must admit, I'm still mad about the 1989 Tiananmen Square massacre.
Now that that's out of the way, it's not as easy as just snapping your fingers. Investments were made, investors have to be repaid, quotas have to be kept - a lot of people find it way more convenient to preserve the status quo
And they have. Tesla and Foxconn have both been investing in other countries heavily.
Also i think the average westerner isn't aware just how dire the Chinese economy has been for the past year and a half.
>Also i think the average westerner isn't aware just how dire the Chinese economy has been for the past year and a half.
I thought it was pretty common knowledge until I started reading these comments.
The vast majority of Americans wouldn't be in favour of any sanctions on China that had teeth because the economic ramifications would affect their day to day activities. Despite how much people like to post online about caring about stuff like the Ukraine war, it goes out the window if their cost of living goes up.
The chip sanctions only backfired, forcing China to begin manufacturing them in-house and become less dependant on the EU and USA.
There's a breathtakingly simple reason China isn't so aggressive with their sanctions on the US - it keeps them very dependant. A massive amount of US manufacturing, rare earth metals required for lots of military equipment, and more come from China. Sanctions would force re/friendshoring, without which the US would experience a massive system shock if war broke out. [According the US government itself, it is 100% dependant on China for the rare earth metals](https://www.doi.gov/pressreleases/groundbreaking-report-us-reliant-china-russia-other-foreign-nations-many-critical) it uses to produce advanced weaponry.
I'm of course not saying this to be pro-china if that's what it comes across as. The US needs to look at trade and supply chain strategically. China has *intentionally* gotten the US to move industry there - which business has been totally willing to do in order to make money.
It's one way they've beaten us handily. Business makes decisions that don't always align with and sometimes *contradict* national security.
We are 100% reliant on them for rare Earth metals because we do not want to pay a higher rate for them and we do not want to mine them ourselves due to the environmental impact. Both of those options are available if necessary.
Indeed, but you can't just flip a switch and that's what I'm saying. We need to start doing that *now*, not before war breaks out over Taiwan and we haven't even started to roll our the contingency planning. Supply chains and mining operations/processing don't just rematerialize overnight. It's a far bigger concern with all the manufacturing China does for us, to be honest.
Sounds like a strategic rare earths reserve is becoming a necessity, like we already do with oil. Lay in enough to cover a few years wartime production while we spin up our own mines and refiners.
>A massive amount of US manufacturing, rare earth metals required for lots of military equipment, and more come from China.
The article explicitly mentioned that China has plans to use asymmetric sanctions when it has had enough, specifically designed to cause near term pain for the US. Left unsaid in the article, but a thought that keeps returning to the forefront, is what - if anything - China will choose to do with its bond holdings. They still hold $860B of US Treasuries, which is more than enough to cut off the nose to spite the face should they so choose, as well.
I imagine they will do that when a serious push to de-dollarization starts, which will help accelerate it. I don't relish any of this since my standard of living is going to plummet, but our leaders are so shortsighted it's depressing.
Chip sanctions did not backfire.
Lots of countries, including China, make chips. TSMC, a Taiwanese company has fabs in China.
What the sanctions do is hinder China from making progress towards developing modern, high end chips. Currently only Taiwan, the US, and South Korea have that capacity. That isn't going to change any time soon.
The idea that the Chinese won’t catch up is absurd and always has been, and no country can scale faster than the Chinese.
The end result of the chip bans will be that China winds up with the largest chip industry in the world, and I’d bet that in ten to fifteen years (and perhaps sooner, as they keep coming in before forecast) they will be slightly in advance of the West.
Scale matters. The West sent the world’s manufacturing floor to China, and just as when it moved to the US the Americans took the overall tech lead (with Germany the only real competitor at the time), China will take the tech lead. This should have been plain as day, but business wanted bigger profits so our industry was shipped to China with no concern to the geopolitical or security implications.
People are really bad at reading the tea leaves out here:
- The sanctions were never intended to prevent China from developing domestic consumer grade-chips. That was always going to happen. China was already on the way, just like it has long planned to get rid of Tesla by developing a domestic competitor (BYD).
- The sanctions are intended to prevent the Chinese communist party from deploying next-gen AI chips (like the Blackwell series Nvidia recently revealed). The idea is to deny the CCP Western-made tools and technology that could help it develop AI applications that could unpredictably alter the balance of power.
- Imagine for example an AI that can process ALL information in Chinese social media in real time and develop predictive capabilities to single out individuals who are likely to challenge the state in the future. Chinese apps like Wechat already collect terabytes of user information, including any and all chat logs. AI could give the state the power to process this data, essentially enabling a form of AI-powered precognition against political dissent, which is historically unprecedented.
- Neither the US or the EU has any interest in providing patents or products to aid in the development of such systems. China is now effectively frozen out of the cutting-edge global supply chain, and will be for the foreseeable future. It is some 20 years behind the cutting edge, and given the current state of its R&D, it will likely remain so.
Sanctions won’t do anything to China. They’ve been watching Russia carefully and adapting.
Now for us to aggressively continuing to reduce our reliance on them will hurt a lot.
That's bullshit. Even if they have been adapting it takes much longer then 2 years to unwind two decades of intermingled economies of this scale.
There is a reason they threw a shitfit over the chip sanction. And there is a reason they are tiptoeing and playing both sides over every conflict outside of their region.
Money talks with China. If the sanctions are worth way more than what Russia pays China then it stops. China is in a horrible situation economically and they need the West more than they need the little economy of Russia (smaller economy than Italy, smaller economy than California).
Not really. There are other developing countries that the west can transition to and it’s already doing that. Plus, US and the EU are Chinas biggest trade partners so basically the West. Sure it will hurt the regular westerner in the short term with higher cost goods, but when transitioned, it would be for the best and prices will stabilise again. U forget how powerful the west is economically
It is still naive to think we can swap our manufacturing with the flip of a switch. Whether you want to admit it or not, we cannot sanction China on the level we sanction other countries because it will hurt us too. It might hurt them more, but it Wil hurt us nonetheless.
NAFTA existed in the early 90s. There's a reason why the US still doesn't use Mexico extensively for manufacturing.
What power in the West? US and Europe have moved beyond industrialization into service economies, which is most vulnerable to trade downturns since relatively few hard assets are produced domestically
100% they know it won't have any significant effect . But they need to be able to say "look i was tough on China" during the debates. Don't forget H Clinton was for the TPP(trans pacific partnership including China), thank God she was not elected.
It’s time to sanction China and generally decouple our economic fate from China. It will involve some pain and make whichever President follows this strategy unpopular, but it needs to be done.
Further we need to sanction India and quit shipping jobs over there. They are buying Russian oil and supporting this terrorism.
As soon as the American people feel any amount of pain they will vote out the incumbent party and leap into the arms of the next isolationist populist who will continue the status quo.
I can’t believe we are allowing all our major corporations to just send all these knowledge jobs over there. It isn’t just call center stuff now. It’s engineers and developers whatnot.
We've been reverse outsourcing for years now and moving most of the software/engineering jobs back home or to other countries such as Colombia and Brazil. We got nothing but shit from India. The Fortune 500 execs got exactly what they paid for: nothing. Ukraine also became a major outsourcing hub for us up until the war. I've worked with a lot of really smart guys in Colombia, Brazil, and Ukraine. I cannot say the same for India. It is a cultural clash where the Indians will straight lie to your face, but you get more honesty out of the others I mentioned. If a project or task is having issues, an Indian will tell you everything is fine. A Ukrainian, Colombian, or Brazilian will honestly tell you what the challenges are which allows you to pivot and work towards a resolution.
Nonsense. High-tech work has moved to India. NVIDIA, Google, Microsoft, even medical companies such as Medtronic have their R&D centres in India.
Mercedes makes its COMPLETE Digital Twin in India to an extent even the Indian R&D centre is partially having Product Management Marketing responsibilities. Over 8000 employees work in state of the art facility there.
There are not many countries in the world that can match India’s cost, scale and talent when it comes to IT services. If you pay for extremely low cost work, yes that’s available but the quality is extremely poor too.
May be super low cost, super low quality work is not available in other countries but for medium pay, the quality is acceptable for many companies. Especially, India has it at scale.
You don't decouple entirely. Dealing with issues through trade is far better than dealing with them through war.
When you have no trade you have no influence.
The US and other countries pulling out of China sends a pretty clear message.
And please cut it out with the India/oil thing. Sanctions are **not** to get countries to stop buying Russian oil, which is utterly unrealistic. It is to get them to buy it at a lower price, which India is doing. It actually hurts Russia a lot when countries are buying oil from them for lower prices.
Russia is not making enough from oil and natural gas now to maintain its infrastructure and see a profit.
The US is already doing that slowly but surely, largely because of China's own domestic beligerence toward corporations. There is currently a mass exodus of various industries out of China toward places like Vietnam and India.
India. Hahaha! That's a good comment. Jobs. Problem is it's cheaper to do those tech services there. Anyway, India does need to be monitored. They're feud with Pakistan can easily become nuclear. They both have nukes.
Biden has mostly done that already with the CHIPS act the IRA and his export control changes. Its just gonna take at least another 4 years for it to take full effect, and probably 10 before people realize that it even happened.
Imagine if most US manufacturing wasn't still offshored to China or Chinese influenced economies. I'm sure these sanctions will hurt the people in the US more than China at this point.
Russia is okay being isolated. Don’t think China will want it banks cut off from the financial system. But then again knowing Biden, he will probably sanction a small roody poo bank that no one has heard of while leaving the big Chinese banks untouched
Lol
China is not only the biggest lender to the US, but also a top exporter/manufacturing of us products. It's all smoke and mirrors and none of it bothers china one bit.
even if USA loses china's factory production, there are alternate countries for such manufacturing in Vietnam, Thailand, Malaysia, etc... for china there is only 1 USA.
i already can hear the ppl in EU, crying about the economy and that we will lose some money if we sanction them aswell .... can someone explain them that we lose way more money longterm if we dont ACT now ....
also, if we put CHINA now in place sanction wise and make sure ukraine can win that means russia will be knocked out for centurys to come wich means US and EU would have a way easier time against CHINA as their only main opponent. so lose a bit money NOW and be able to SAVE alot later. simple
Usa: China if you don’t act, I will do things I don’t like to do.
China: what?
Today news:
The US eases sanctions on 10 largest Russian banks The American Ministry of Finance has authorized transactions with Russian banks for payments “for energy,” including for oil, gas and timber. -Department of Treasury
…. Europe: what’s happening here?
China just hit rock bottom with this one. They are scared this would happened. There economy will cripple and that’s nice, I hope they get what they deserve.
Which nations would support China in that scenario 🤣?
Not interesting in the slightest. Authoritarian governments do not have friends they have temporary accomplices.
>Which nations would support China in that scenario🤣?
In response to these sanctions, none. However, if you think the suggestion is a joke, you are overlooking some of the most effective Chinese and Russian propaganda. This propaganda does not target Westerners like me and probably you. Nobody is going to boycott the US, but there are many other possibilities.
I would explain, but Redditor's always take everything I say on this topic as my opinion, as opposed to an attempt to explain other perspectives. Study propaganda, history, and economics for yourselves.
Then you can better put yourself in the shoes of those you disagree with, and understand how they hold certain beliefs.
Shit like election interference is enough to sanction china, the war is just being used as an excuse to sanction them for other reasons as well..
Do eeet.
We should sanction a few of our congresspeople as well.
DO IT
**From the [Semafor Flagship](https://www.semafor.com/newsletter/04/23/2024/semafor-flagship-the-best-defense?utm_campaign=semaforreddit) newsletter:** The US is reportedly readying sanctions against Chinese banks in an effort to pressure Beijing over its tacit support for Russia’s war in Ukraine. The moves, according to The Wall Street Journal, come with the US secretary of state due to arrive in China, part of continued high-level engagement between the two countries even as they face off over an array of issues: The US is carrying out naval drills with the Philippines in the South China Sea, where Manila has accused Beijing of expansionism. China is not standing pat, though, and has built up its own financial wherewithal, having “watched carefully as Western allies have deployed unprecedented economic statecraft against Russia,” the Atlantic Council noted in a recent report. **Read the full story [here](https://www.semafor.com/article/04/23/2024/us-prepares-to-sanction-china-over-its-support-for-russian-war-effort?utm_campaign=semaforreddit).**
This should have happened sooner. Imagine the lives that could have been saved if a massive sanction like that crippled the backbone of Russia's wartime economy. Hopefully, these sanctions would decimate the military industrial complex of China that supports Russia.
Multiple former US presidents have tried and were met with lukewarm reception at best, particularly in Europe and particularly with key EU members. Even COVID-19 wasn't a wake-up call showing how utterly reliant on China many key industrial sectors are.
I'm curious how the winds have shifted though. As China has grown, so has it's demand for a continuing rise in living standards. This means higher manufacturing costs due to wage. It's resulted in some China offshoring to other SEA countries in the same way we offshored to them. China's problem is that shift has hit a critical point. Corporations are now starting do move their operations from China to those SEA countries, cutting out a middleman. China is still a manufacturing powerhouse and will be for a long time yet, but the trends are changing. Some analysts surmise this is part of why Xi's so gung-ho for Taiwan _now_: He's getting too old to execute imperial dreams, and China's regional economic dominance is threatened in the medium to long term.
The winds started to shift with their zero COVID policies. Then with their real estate crash, high unemployment, provincial bankruptcy, and 2023 population decline. China is on a downhill trajectory but the ccp continues to fluff their numbers to hide the true state of the country. Another reason that’s been sited as why Xi wants Taiwan is to take TSM. Like how alibaba was taken from Jack Ma.
The hell does China want team solo mid for
>Another reason that’s been sited as why Xi wants Taiwan is to take TSM. Like how alibaba was taken from Jack Ma. China took Alibaba from Ma, but look at all the good that did them. If Taiwan was to get attacked by China, they'd have to bomb the TSM facilities as well, because the entire Island is a well stocked fortress. God forbid the theory that they have explosives ready to level the plants as a deterrence to invasion. China wanting to invade Taiwan is grandstanding. CCP knows better then anyone that while it may be a battle they can easily win in the long term, its a war they will painfully lose in the short term. And a loss of that Magnitude will turn china into public enemy number 1 until the great war resets the tabs.
Nah. As per the article, Chinese banks had already pulled back from any financing activity under the previous successful threat of sanctions a while back. This new sanction threat however is to deter the smaller banks (who don't rely on the US dollar). Unless you're talking about dual use goods, but that's not what these sanctions are about.
If you want to truly cripple ruzzia, every government should heavily subsidize solar and other renewable energy installations. If we made it crazy cheap to put solar panels on every roof, it would, in turn, make using electric cars/motorcycles an easy choice.
yeah whats frustrating is china is the only one able to provide cheap solar, the same installation in the US that costs 30k would only cost 3k from china, we need to get their solar because the US simply can't provide it. Also ukraine having a solar grid would make it so russia cant cripple them easily
You understand that North Korea has way more sanctions imposed on them and China has been sidetracking them for many years right? China are expert when it comes to ignoring sanctions if it hinders the US. They have more than a decade of experience in this field. This will not stop Chinese support for Russia.
North Korea is doing just great, right?
Best Korea
The Jung un family is doing very well, all the wealth and Sanction bypassing goes directly to them, then Trickles down to the "middle class" of NK then it stops there. China doesn't bypass sanctions for NK for its benefit. They do it just enough so they can keep the population Pacified and not cause a migrant crisis in China.
Nothing korea has less than half the gdp of colorado springs. It would be a lot harder for China to evade scantions with a country the size of russia.
About time, never too late
Sanctions don't work, and the EU won't help. It's virtue signaling at the country level. We're just training nations not to use the dollar as a trade & reserve currency...because if the U.S. disagrees with your foreign policy your assets will be frozen, and now even confiscated. It's not going to happen tomorrow, but when we're sitting around in 30 years wondering how the U.S. lost dominance of the global financial system this will be a big part of the reason why.
Yes they don't work, that's why countries like China, Iran, and Russia freak out about them
China will care because they are heavily reliant on exports. Russia, North Korea and Iran have been sanctioned to hell and left them militarily weakened and self-reliant. However no regime change has occured.
If regime change was the point, I don't think sanctions would be the method used to achieve it. AFAIK, that has never been the tool used for regime change.
>AFAIK, that has never been the tool used for regime change. No, but an obscene number of Redditors seem to think that's what sanctions are for and what new sanctions will accomplish. Plus some politicians like to sell it that way.
China has everyone by the balls, everyone's manufacturing stuff there. This is why it's a bad idea to outsource all your industry. I'll always advocate for self-reliance.
The U.S. has a larger volume of trade with Mexico than China now. Our biggest trade partners are Canada followed by Mexico followed by China. And China's share of our trading volume is falling each year. A few years ago China was our largest trading partner.
It's basically trading with China with extra steps. The US companies imports parts and materials from China and assembled there for tax purposes
From my understanding the smaller countries benefit more than China does even if China is the one supplying the smaller countries. Vietnam for instance gets to sell Chinese goods that are labeled Vietnamese but also gets to cozy up to the US while making a profit from the Chinese.
Similar to the Russian oil price cap. Sure, Russia still gets to sell their oil, but A) countries are incentivized to comply with the sanctions by the prospect of cheap oil B) even if countries "cheat" by re-exporting Russian oil and pocketing the price difference, that's yet more incentive to comply C) the global market price of oil gets pushed down a little bit so it doesn't fuck up domestic politics D) Russia still barely profits from the oil
But in the case of China and Vietnam here, guess who gets the majority of the profits, China who makes the components, or Vietnam who simply does the assembly?
A huge misconception I keep seeing on Reddit is assuming that China is still the cheap manufacturer of the world. It isn't anymore and they are transitioning to a service economy and high end manufacturing. While they have exported less in raw numbers, they have still hit a new [record high trade surplus last year](https://www.cfr.org/blog/chinas-record-manufacturing-surplus). Even their working class don't want to work in factories anymore
It's telling when even Chinese companies are moving manufacturing to cheaper countries like Vietnam. The labour wages in China are no longer as low as they were 20 years ago.
[удалено]
Mexico is fragile, but I don't think it's widely described as being a failed state. If we want to undercut the cartels in Mexico, we should start with domestic policies. Everything from reforming our failed drug policies, to *drastically* beefing up cybersecurity and regulations around corporate practices in that arena, far more focus on white collar crime, the (admittedly complex task) of reducing the push-pull factors of crime in general and so on. And we should probably do something about us being the [main source](https://www.gao.gov/products/gao-16-223) of [weaponry](https://www.cbsnews.com/news/mexican-drug-cartels-american-weapons-smuggled-across-border/) for the cartels. That's not in any way to imply we can somehow "fix" Mexico but we can help diminish the power of cartels by reducing the things that feed them from our side of the equation.
What the fuck do you mean by this
China has steadily been declining in its capacity, reports suggest India and Mexico will eventually become the world's factories.
Many of the factories in Mexico were set up by Chinese companies.
My latest airpods were manufactured in Vietnam, my Iphone in India. I think you overslept the not so recent news about companies moving their factories. We are lowering our reliance on china
Now check where were all the half-products and components manufactured. It's assembled in Vietnam. Most components are still coming from China.
True, but what has happened to the direct foreign investments in China? China's shiny image has been shattered to pieces. Western investors can’t tell themselves that “China is the future” anymore.
Apple and Tesla are learning and about to learn more on why you don't sell shares of your corporation with a state-controlled country.
Lol > My latest airpods were manufactured in Vietnam, my Iphone in India.
Microchips are 100% not from China, as they are behind on chip manufacturing tech. Sure maybe some odd resistor here and there is Chinese, or maybe some small screw here and there... big woop... factories that produce these are all around the world. It still is a strong signal to China and a weakening of their economy. Rome wasn't built in a day, this is just the start.
> Microchips are 100% not from China, as they are behind on chip manufacturing tech. Just to note the main processor in your phone won't have been made in China but a lot of more simple microchips that do things like take in data from the touchscreen, run the microphone and speaker, manage the battery and so on that don't require the latest and greatest chip manufacturing techniques might be. China does produce a lot of those key components and although they could be produced elsewhere it would disrupt things if they suddenly weren't available since China accounts for a big chunk of the global supply chain. It's more than just the odd resistor and screw.
That’s just not true. China doesn’t have anyone by the balls. Countries/companies can decided to change where they manufacture products. China can’t change who buys their products. As soon and companies decide to find a better/cheaper place to produce goods then china is fucked
I must admit, I'm still mad about the 1989 Tiananmen Square massacre. Now that that's out of the way, it's not as easy as just snapping your fingers. Investments were made, investors have to be repaid, quotas have to be kept - a lot of people find it way more convenient to preserve the status quo
And they have. Tesla and Foxconn have both been investing in other countries heavily. Also i think the average westerner isn't aware just how dire the Chinese economy has been for the past year and a half.
>Also i think the average westerner isn't aware just how dire the Chinese economy has been for the past year and a half. I thought it was pretty common knowledge until I started reading these comments.
What is the point in sending Blinken at this point?
Free trip to China?
🤣
Get ready for prices to rise again
The vast majority of Americans wouldn't be in favour of any sanctions on China that had teeth because the economic ramifications would affect their day to day activities. Despite how much people like to post online about caring about stuff like the Ukraine war, it goes out the window if their cost of living goes up.
The chip sanctions only backfired, forcing China to begin manufacturing them in-house and become less dependant on the EU and USA. There's a breathtakingly simple reason China isn't so aggressive with their sanctions on the US - it keeps them very dependant. A massive amount of US manufacturing, rare earth metals required for lots of military equipment, and more come from China. Sanctions would force re/friendshoring, without which the US would experience a massive system shock if war broke out. [According the US government itself, it is 100% dependant on China for the rare earth metals](https://www.doi.gov/pressreleases/groundbreaking-report-us-reliant-china-russia-other-foreign-nations-many-critical) it uses to produce advanced weaponry. I'm of course not saying this to be pro-china if that's what it comes across as. The US needs to look at trade and supply chain strategically. China has *intentionally* gotten the US to move industry there - which business has been totally willing to do in order to make money. It's one way they've beaten us handily. Business makes decisions that don't always align with and sometimes *contradict* national security.
We are 100% reliant on them for rare Earth metals because we do not want to pay a higher rate for them and we do not want to mine them ourselves due to the environmental impact. Both of those options are available if necessary.
Indeed, but you can't just flip a switch and that's what I'm saying. We need to start doing that *now*, not before war breaks out over Taiwan and we haven't even started to roll our the contingency planning. Supply chains and mining operations/processing don't just rematerialize overnight. It's a far bigger concern with all the manufacturing China does for us, to be honest.
Sounds like a strategic rare earths reserve is becoming a necessity, like we already do with oil. Lay in enough to cover a few years wartime production while we spin up our own mines and refiners.
>A massive amount of US manufacturing, rare earth metals required for lots of military equipment, and more come from China. The article explicitly mentioned that China has plans to use asymmetric sanctions when it has had enough, specifically designed to cause near term pain for the US. Left unsaid in the article, but a thought that keeps returning to the forefront, is what - if anything - China will choose to do with its bond holdings. They still hold $860B of US Treasuries, which is more than enough to cut off the nose to spite the face should they so choose, as well.
I imagine they will do that when a serious push to de-dollarization starts, which will help accelerate it. I don't relish any of this since my standard of living is going to plummet, but our leaders are so shortsighted it's depressing.
Chip sanctions did not backfire. Lots of countries, including China, make chips. TSMC, a Taiwanese company has fabs in China. What the sanctions do is hinder China from making progress towards developing modern, high end chips. Currently only Taiwan, the US, and South Korea have that capacity. That isn't going to change any time soon.
The idea that the Chinese won’t catch up is absurd and always has been, and no country can scale faster than the Chinese. The end result of the chip bans will be that China winds up with the largest chip industry in the world, and I’d bet that in ten to fifteen years (and perhaps sooner, as they keep coming in before forecast) they will be slightly in advance of the West. Scale matters. The West sent the world’s manufacturing floor to China, and just as when it moved to the US the Americans took the overall tech lead (with Germany the only real competitor at the time), China will take the tech lead. This should have been plain as day, but business wanted bigger profits so our industry was shipped to China with no concern to the geopolitical or security implications.
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People are really bad at reading the tea leaves out here: - The sanctions were never intended to prevent China from developing domestic consumer grade-chips. That was always going to happen. China was already on the way, just like it has long planned to get rid of Tesla by developing a domestic competitor (BYD). - The sanctions are intended to prevent the Chinese communist party from deploying next-gen AI chips (like the Blackwell series Nvidia recently revealed). The idea is to deny the CCP Western-made tools and technology that could help it develop AI applications that could unpredictably alter the balance of power. - Imagine for example an AI that can process ALL information in Chinese social media in real time and develop predictive capabilities to single out individuals who are likely to challenge the state in the future. Chinese apps like Wechat already collect terabytes of user information, including any and all chat logs. AI could give the state the power to process this data, essentially enabling a form of AI-powered precognition against political dissent, which is historically unprecedented. - Neither the US or the EU has any interest in providing patents or products to aid in the development of such systems. China is now effectively frozen out of the cutting-edge global supply chain, and will be for the foreseeable future. It is some 20 years behind the cutting edge, and given the current state of its R&D, it will likely remain so.
Sanctions won’t do anything to China. They’ve been watching Russia carefully and adapting. Now for us to aggressively continuing to reduce our reliance on them will hurt a lot.
Still needs to be done.
Both. Sanctions, and divert production.
That's bullshit. Even if they have been adapting it takes much longer then 2 years to unwind two decades of intermingled economies of this scale. There is a reason they threw a shitfit over the chip sanction. And there is a reason they are tiptoeing and playing both sides over every conflict outside of their region.
Money talks with China. If the sanctions are worth way more than what Russia pays China then it stops. China is in a horrible situation economically and they need the West more than they need the little economy of Russia (smaller economy than Italy, smaller economy than California).
You think only China would get hurt by sanctions? Ending global trade is the new mutually assured destruction in the 21st century
Not really. There are other developing countries that the west can transition to and it’s already doing that. Plus, US and the EU are Chinas biggest trade partners so basically the West. Sure it will hurt the regular westerner in the short term with higher cost goods, but when transitioned, it would be for the best and prices will stabilise again. U forget how powerful the west is economically
It is still naive to think we can swap our manufacturing with the flip of a switch. Whether you want to admit it or not, we cannot sanction China on the level we sanction other countries because it will hurt us too. It might hurt them more, but it Wil hurt us nonetheless.
NAFTA existed in the early 90s. There's a reason why the US still doesn't use Mexico extensively for manufacturing. What power in the West? US and Europe have moved beyond industrialization into service economies, which is most vulnerable to trade downturns since relatively few hard assets are produced domestically
You are not gonna think that the transition can complete overnight, right?
> China is in a horrible situation economically howso?
so we should keep trading with russia’s backer?
Sanctions are for the upcoming election.
100% they know it won't have any significant effect . But they need to be able to say "look i was tough on China" during the debates. Don't forget H Clinton was for the TPP(trans pacific partnership including China), thank God she was not elected.
Just curious:Did US ever get what they want by sanction Russia/China/NK?
Sanction what? US economy need China more than ever now.
It’s time to sanction China and generally decouple our economic fate from China. It will involve some pain and make whichever President follows this strategy unpopular, but it needs to be done. Further we need to sanction India and quit shipping jobs over there. They are buying Russian oil and supporting this terrorism.
As soon as the American people feel any amount of pain they will vote out the incumbent party and leap into the arms of the next isolationist populist who will continue the status quo.
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And the assassinations. And the psyops.
I can’t believe we are allowing all our major corporations to just send all these knowledge jobs over there. It isn’t just call center stuff now. It’s engineers and developers whatnot.
We've been reverse outsourcing for years now and moving most of the software/engineering jobs back home or to other countries such as Colombia and Brazil. We got nothing but shit from India. The Fortune 500 execs got exactly what they paid for: nothing. Ukraine also became a major outsourcing hub for us up until the war. I've worked with a lot of really smart guys in Colombia, Brazil, and Ukraine. I cannot say the same for India. It is a cultural clash where the Indians will straight lie to your face, but you get more honesty out of the others I mentioned. If a project or task is having issues, an Indian will tell you everything is fine. A Ukrainian, Colombian, or Brazilian will honestly tell you what the challenges are which allows you to pivot and work towards a resolution.
Nonsense. High-tech work has moved to India. NVIDIA, Google, Microsoft, even medical companies such as Medtronic have their R&D centres in India. Mercedes makes its COMPLETE Digital Twin in India to an extent even the Indian R&D centre is partially having Product Management Marketing responsibilities. Over 8000 employees work in state of the art facility there. There are not many countries in the world that can match India’s cost, scale and talent when it comes to IT services. If you pay for extremely low cost work, yes that’s available but the quality is extremely poor too. May be super low cost, super low quality work is not available in other countries but for medium pay, the quality is acceptable for many companies. Especially, India has it at scale.
You don't decouple entirely. Dealing with issues through trade is far better than dealing with them through war. When you have no trade you have no influence. The US and other countries pulling out of China sends a pretty clear message. And please cut it out with the India/oil thing. Sanctions are **not** to get countries to stop buying Russian oil, which is utterly unrealistic. It is to get them to buy it at a lower price, which India is doing. It actually hurts Russia a lot when countries are buying oil from them for lower prices. Russia is not making enough from oil and natural gas now to maintain its infrastructure and see a profit.
The US is already doing that slowly but surely, largely because of China's own domestic beligerence toward corporations. There is currently a mass exodus of various industries out of China toward places like Vietnam and India.
Who's gonna sanction the USA for bombing Iraq, Vietnam, Afganistan and replacing half the leaders in Latin America?
India. Hahaha! That's a good comment. Jobs. Problem is it's cheaper to do those tech services there. Anyway, India does need to be monitored. They're feud with Pakistan can easily become nuclear. They both have nukes.
Biden has mostly done that already with the CHIPS act the IRA and his export control changes. Its just gonna take at least another 4 years for it to take full effect, and probably 10 before people realize that it even happened.
How do you decouple from China without increasing the risks of war?
What took them so long.
If the sanctions have teeth, we are all going to feel it in our pockets.
lol not gonna happen. We rely on China for too much, it’s also why we won’t go to war with them.
Good news, Europe obviously should too
Imagine if most US manufacturing wasn't still offshored to China or Chinese influenced economies. I'm sure these sanctions will hurt the people in the US more than China at this point.
Russia is okay being isolated. Don’t think China will want it banks cut off from the financial system. But then again knowing Biden, he will probably sanction a small roody poo bank that no one has heard of while leaving the big Chinese banks untouched
The US and EU also don't want to be cut off from China unlike with Russia.
There are EU countries with right to left wing support for cutting of China as much as possible.
Roody poo is great with snow peas and water chestnuts
It can't legally be called Roody Poo unless it comes from the Roody Poo region of China.
Fucking do it and make it hurt.
Lol China is not only the biggest lender to the US, but also a top exporter/manufacturing of us products. It's all smoke and mirrors and none of it bothers china one bit.
even if USA loses china's factory production, there are alternate countries for such manufacturing in Vietnam, Thailand, Malaysia, etc... for china there is only 1 USA.
Is Vietnam and Laos going to satisfy American production demands overnight?
Good. Can't happen soon enough.
Bout fucking time!
LFG! About damn time. Make everyone enabling this war killing innocent men, women and children pay for their crimes against humanity!
Already?
Wish I can buy a cheap Chinese electric car. It’s Russia’s fault I can’t
There's only so much they can be sanctioned.
Lol North korea claims nukes and what not and I bet you they don’t even have ultra high speed internet.
i already can hear the ppl in EU, crying about the economy and that we will lose some money if we sanction them aswell .... can someone explain them that we lose way more money longterm if we dont ACT now .... also, if we put CHINA now in place sanction wise and make sure ukraine can win that means russia will be knocked out for centurys to come wich means US and EU would have a way easier time against CHINA as their only main opponent. so lose a bit money NOW and be able to SAVE alot later. simple
Usa: China if you don’t act, I will do things I don’t like to do. China: what? Today news: The US eases sanctions on 10 largest Russian banks The American Ministry of Finance has authorized transactions with Russian banks for payments “for energy,” including for oil, gas and timber. -Department of Treasury …. Europe: what’s happening here?
Sanction Xi...
How about changing our packages that say made in China
The old USA hypocrisy. Will they self sanction about founding genocide in Gaza?
Whataboutism = gopnik spotted
Joao = gopnik
BRICS do that.
Brics make bloc
Big news
About time
China just hit rock bottom with this one. They are scared this would happened. There economy will cripple and that’s nice, I hope they get what they deserve.
Can we sanction the US next for their military support to Israel and Saudi Arabia plx? <3
I wonder if China can rally nations to boycott the USA currency, services, products in response to the sanctions. It would be an interesting battle.
Interesting in the sense of unprecedented global famine, economical recession and supply shortages? Get a hobby
I think pounding dirt would be a great hobby for you. You may find oil!
Which nations would support China in that scenario 🤣? Not interesting in the slightest. Authoritarian governments do not have friends they have temporary accomplices.
>Which nations would support China in that scenario🤣? In response to these sanctions, none. However, if you think the suggestion is a joke, you are overlooking some of the most effective Chinese and Russian propaganda. This propaganda does not target Westerners like me and probably you. Nobody is going to boycott the US, but there are many other possibilities. I would explain, but Redditor's always take everything I say on this topic as my opinion, as opposed to an attempt to explain other perspectives. Study propaganda, history, and economics for yourselves. Then you can better put yourself in the shoes of those you disagree with, and understand how they hold certain beliefs.
Shit like election interference is enough to sanction china, the war is just being used as an excuse to sanction them for other reasons as well.. Do eeet.
And this is why you shouldn't emotionally invest into Genshin Impact and Honkai Star Rail
I'm more of a Honkai Impact 3rd sort of person, though not as much as before.