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Why Did China Just Devalue the Yuan? How Trade Works with Free-Floating Currency
- kakali 7y agoThis article opens up with a mistake? It's 7 yuan per dollar. Not the other way around.
- joshuafkon 7y agoWhoops - good catch! Little dyslexia I guess! Thanks!
- deleted 7y ago[deleted]
- xivzgrev 7y agoWhat’s to stop exporting companies from increasing prices? Say I’m a Chinese manufacturer of plates. I have an American customer buying 6m yuan worth every year. Previously that cost them $1m USD. Now it only costs them $857k. In both cases I’m getting 6m yuan, so I’m happy. Or, do I increase the price to 7m yuan because I know that’s what the customer Usually pays, now I’m VERY happy? Does this achieve the goal of growth (6m to 7m yuan) or does it not count because the volume stayed the same?
- scaryclam 7y agoFrom what I understand, nothing stops that from happening really. Though if a company is selling both to the US and to somewhere else that doesn't use the dollar, the cost increase may end up damaging business elsewhere. Giving the US customer a price hike and not others is also likely to damage business relations, so generally it seems that it's safer and less complicated to keep the price the same and just sell more units.
- AnthonyMouse 7y ago> Though if a company is selling both to the US and to somewhere else that doesn't use the dollar, the cost increase may end up damaging business elsewhere. Unless the "somewhere else" uses the yuan, currency devaluation doesn't work that way. Even if the exchange rate is tied to the dollar by fiat, devaluing it does so against all other currencies, because nobody is going to accept less yuan for their euros than they could get by exchanging euros for dollars and then dollars for yuan. But that still doesn't mean they can raise prices, because the whole point of the currency devaluation is to make them more competitive. Raising prices does the opposite. And you can't claim the whole thing as margin if that would have caused you to lose the contract to begin with, which was the original reason for the currency devaluation. You may also have to compete with other local suppliers who are operating under the same nominal reduction in local costs.
- rtkwe 7y ago> Even if the exchange rate is tied to the dollar by fiat, devaluing it does so against all other currencies, because nobody is going to accept less yuan for their euros than they could get by exchanging euros for dollars and then dollars for yuan. Depends on the fees at each hop. A small fee could eat up the whole arbitration opportunity for our hypothetical EU or US buyer.
- AnthonyMouse 7y agoExcept that nobody actually does it that way because the fact that they (including large players that don't pay anyone commissions) could do it just increases the number of yuan anyone can get for a euro.
- joshuafkon 7y agoWell, currently (more or less) the devaluation just offsets the new tariffs that have been imposed. So in real terms there wouldn’t be a huge change. Absent the tariffs it would depend on the specific supply and demand for the good. I suspect both the manufacturer and the customer would split the value in some way. Interestingly, the growth to the economy arises through how the devaluation impacts the savings and consumption rate for the countries in question. Weakening the yuan depresses Chinese household consumption and subsidies foreign household consumption. It is this change in national savings and consumption that drives the trade balance.
- rbavocadotree 7y agoWhy does weakening the yuan depress Chinese household consumption? Aren't households buying Chinese goods with yuan, and therefore a weakening currency shouldn't matter? Or is it that they have less purchasing power for foreign goods and this effects household consumption?
- gamedori 7y agoPresumably a lot of domestic Chinese goods require materials from abroad to produce. Remember that until a few years ago China had to import the tips for ballpoint pens.
- ww520 7y agoA household has a fixed amount of yuan. More expensive foreign goods take up a larger portion of that amount, leaving less for domestic consumption. Imagine every household does it, leading to less demand for domestic goods.
- 9nGQluzmnq3M 7y agoAlternatively, households stop buying expensive foreign goods and substitute cheaper but potentially inferior domestic goods (eg. baby formula that may be laced with melamine). So domestic manufacturers can still win, even if households don't.
- vinaypai 7y agoThe idea is that the cheaper effective prices encourages foreign buyers to buy more, generating more economic activity. Of course it also makes imports more expensive but if the country is a net exporter, the net effect is positive for them.
- rubber_duck 7y agoWell it subsidies exporters and debtors (unless your debt is in foreign currency) while punishing importers and savers
- onepointsixC 7y agoSure but there's all the US tariffs which artificially increased the prices in the first place. Furthermore there's the inflationary effect of the currency devaluation. China imports lots of raw materials for manufacturing as well as food and energy. So your costs to making that plate are increasing and the wages you pay your workers isn't worth as much as it used to be. Yuan devaluation effectively takes wealth from all Chinese and puts it into the hands of Chinese exporters.
- dragonsh 7y agoWell here except for the labor costs, raw material and machinery costs will increases. Earlier need to pay less but need to pay more due to devaluation. So it reduces profits and there by investments and capital expenditure. That's the reason trade war is reverberated across globe especially in raw material and component countries like Australia, Germany, France, Japan and Korea. This will bring down a global slow down not specific to China and USA. Since Global trade is always multi-lateral and impact can't be gauged completely. Moreover investments are driven by perception and this lower profits and growth outlook will dampen the overall sentiments.
- zhte415 7y agoWhat's to stop a question? That depends on how you write your contract. FOB or CIF? CFR perhaps. And what plates? Trade finance? Company finance? LOC? Volume of plates, consistency, mass, packing material, details on delivery? Trade shipping contracts do go into 50 pages for a reason.
- User23 7y agoIt should be noted that a central bank with a floating currency is constrained in its control of interest rates the more it controls foreign exchange and vice versa. Using tariffs to constrain the actions of foreign central banks is really quite interesting. While China has succeeded in offsetting tariffs with inflation for now, they are paying for it by giving up policy flexibility, whereas the US can effectively control the price of the yuan with tariffs.
- deleted 7y ago[deleted]
- cletus 7y agoThis is one of the few articles on HN that I read the whole way through. Good job whoever wrote it. The interesting thing here is that the case is made that China can (and does) manipulate its currency and that devaluing one's currency is what has led to the shift of manufacturing jobs from the developed world to China (and other places) but it also notes that this suppression of currency value is becoming increasingly difficult. Doesn't this support the argument that currency manipulation is ultimately time limited? On a side note, I always like to point people to this [1] on the subject of free trade, specifically the conflation between free trade and free movement of capital. [1] http://economixcomix.com/home/tpp/ http://economixcomix.com/home/tpp/
- merpnderp 7y agoMaybe, but what happens to the US federal budget once trade balances become more neutral and the demand for federal debt drops through the floor? If this is time limited, the US federal budget, and by proxy the US economy, is time limited.
- joshuafkon 7y agoThank you so much - I’m so glad you enjoyed it! If you’re interested in this topic I highly recommend “The Great Rebalancing” by Micheal Pettis. A really good book that looks at how currency manipulation and other factors have created imbalance in the global economy. I’ve also written a book which touches on this - but focuses more on the massive sovereign debt burdens that have been created in large part though these trade imbalances - particularly in an aging world. https://www.cassandracapital.net/books https://www.cassandracapital.net/books
- mooreds 7y agoIf you like Pettis, you may also want to subscribe to his blog: https://carnegieendowment.org/chinafinancialmarkets/ https://carnegieendowment.org/chinafinancialmarkets/ I have enjoyed his perspective for years.
- joshuafkon 7y ago
- stcredzero 7y agoBoth Donald Trump and Elizabeth Warren want the dollar to be weaker because, as we will see, a weaker currency will boost exports. So, is this one way to summarize it: The lowlier a country's populace is on the world stage, the better the balance of trade, and the more the country's elites benefit? Of course, this isn't true 100% across the board. Make a country's economy backwards enough, and its businesses will lose the ability to compete in high margin value add goods.
- KaoruAoiShiho 7y ago*rolls eyes. To look at whether or not the yuan is being devalued stop looking at it vs just the dollar but against all other currencies. The trade war is pushing up the dollar significantly. Today's value vs Aug 19th 2018. Yuan vs Euro 0.13 vs 0.13 Yuan vs Pound sterling 0.11 vs 0.12 Yuan vs Yen 15.11 vs 16.06 Yuan vs Indian Rupee 10.15 vs 10.14 TLDR: Yuan is basically the same, rather it's the dollar that's gaining.
- JumpCrisscross 7y ago> against all other currencies The correct method is a trade-weighted basket of currencies. So if you trade 90% with India and 10% with Japan, you weight the moves accordingly. By this method, the renmimbi has devalued. Just not by as much as it appears by just watching the dollar. More critically, the Chinese government fixes the renmimbi-dollar trading range. This gives this pair (among others) special status over others.
- KaoruAoiShiho 7y agoThere are a number of measures. Looking at a chart you can see the trend yourself instead of taking it from OP. https://imgur.com/a/5sZRJbW https://imgur.com/a/5sZRJbW
- JumpCrisscross 7y agoREER is a domestically-scoped tool. It answers “should the currency move,” not “has it been pushed?”
- vagab0nd 7y agoI still can't wrap my head around this topic after reading the article. >> Yuan is not able to escape China, and therefore while other countries might see capital flee the country long before the point China has reached. China has been able to prevent a collapse of its currency. Why would Yuan escape China and why is it a bad thing for its currency?
- joshuafkon 7y agoChina has strict capital controls to prevent money from leaving the country. If people believe that China is going to substantially devalue their currency, the will try to pull money out of the country and invest it elsewhere. The risk is that the currency would then devalue more than China wants - to the point that they have very high inflation https://chinaeconomicreview.com/for-china-the-risk-of-a-second-wave-of-capital-flight-is-now-severe/ https://chinaeconomicreview.com/for-china-the-risk-of-a-seco...
- bduerst 7y agoChinese wealthy have been historically moving capital out of China regardless of the controls. It has been so prevalent that the newer housing development next to where I live doesn't have the number four in any of their street addresses. Wouldn't a weakened Yuan make them want to move the wealth back, to capitalize on the new arbitrage?
- simonebrunozzi 7y agoWhat's with number 4? And, do you live in China or somewhere else where a lot of Chinese wealthy bought property?
- brobinson 7y agohttps://en.wikipedia.org/wiki/Tetraphobia https://en.wikipedia.org/wiki/Tetraphobia
- qtplatypus 7y ago
- corl3onis 7y agoExcellent article. I wonder how this news will affect those worried about the inverted yield curve?
- syntaxing 7y agoThis is an awesome article! Is it possible to write an article about the next recession and it's implications? Our current financial health and environment is really different from the last one and every person I know keeps on telling how bad the next recession is going to be.
- joshuafkon 7y agoI am working on a post on just that topic now! if you subscribe on my website it will send you a notification when I publish a new blog post https://www.cassandracapital.net/ https://www.cassandracapital.net/
- tabtab 7y agoEven if the next recession is mild, the US has very little room for a stimulus thanks our debt. It's hard to predict the depth of a future recession, but one can say for sure that we have fewer options because of the debt. Keynesian principle is basically a fancy form of "save up for rainy days". We didn't, so hope the storm is short.
- MuffinFlavored 7y ago$4t was printed to bail out the banks. What is stopping more money from being printed this time, in the form of economic stimulus?
- 1PlayerOne 7y ago(Hyper)Inflation?
- tabtab 7y agoIf you mean "Quantitative Easing", it's arguable whether it's the same as "printing money". I won't get into that debate here. In a related issue, there's a theory making its circles in both right and left camps that if inflation is sub-par for a while, say below 2%, then printing more money won't cause problems. Why inflation is lower than expected is an economic puzzle. But printing money to avoid paying debt may create new economic puzzles. If they try it, try it gradually please. (The ideal annual inflation rate tends to be around 2.0% to 2.3%, based on historical record. This is in aggregate. Highs or lows tend to affect different people differently.)
- dec0dedab0de 7y agoI would think it's better to have more imports than exports. The importer gets goods and services, the exporter gets numbers in a computer. Though I suppose it's a problem when the importer doesn't know how to take care of itself anymore.
- option 7y agothe exporter then uses those numbers to buy resources (natural and political), real estate, media and influence inside importer. Until the importer is 100% dependent
- jpollock 7y agoThen the importer has a revolution, wipes all debts and starts again.
- s1artibartfast 7y agoSeizing the assets of foreign national corporations within the US would be mutual assured financial destruction. Markets would crash and plunge the country into depression/recession as foreign capital flees the US.
- ummonk 7y agoDidn’t happen when the US did it to Iran.
- derriz 7y agoWhen did this ever happen?
- tabtab 7y agoRe: China devalued their currency to offset the U.S. tariffs. But China is between a rock and a hard place. Tariffs risk severe damage to their fragile economy if not offset with currency devaluation. But, with the enormous debt burden the Chinese are now under, currency devaluation creates the real risk of capital flight from the country - and makes it more difficult for China to service it’s dollar denominated debt. Trump knows that China is in a weaker position than the US. However, all this gamesmanship (and gameswomanship) risks crashing both economies (and the world economy). Trump is willing to play chicken as long as the US has the edge. But chicken is still a risky game. An interesting economic experiment is underway. Unfortunately, we are the lab rats.
- kissickas 7y agoInteresting article. One thing that wasn't made clear - who is holding the new Chinese debt? Chinese consumers are the first borrowers, I assume, but then are local banks borrowing from the Chinese central bank? Is the central bank then borrowing from abroad, and why is this debt dollar-denominated? Why don't they just pay it off with cash instead of continuing to put that cash into US Treasuries? PS, @joshuafkon, you have an unnecessary apostrophe in the "it's" in the last sentence!
- naveen99 7y agono mention of how devaluing the currency affects or is affected by the interest rate. china is lowering interest rates... china's interest rate is still higher than than the us feds. https://www.cnn.com/2019/08/19/investing/china-interest-rate-cut/index.html https://www.cnn.com/2019/08/19/investing/china-interest-rate...
- partiallypro 7y agoThe US really has China in a bind here, and few will admit it. China needs to weaken its currency to offset tariffs by making their exports cheaper...but China is very very short on dollars, and each devaluation makes their onshore debt much harder to maintain. I'm sure China is waiting out the 2020 election, hoping the next President will be more dovish on China...but I think everyone (except Biden) is pretty hawkish on China within that Democratic field.
- ETHisso2017 7y ago>China is very very short on dollars $3T of dollar reserves would like to have a word with you.
- partiallypro 7y agoa) Investment banks don't believe that number is completely accurate b) China has used a lot of reserves propping up offshore RMB. c) It's a lot more complicated than that. d) 1.2 trillion in dollar debt has to be rolled over just this year https://www.bloomberg.com/opinion/articles/2019-01-06/china-s-dollar-debt-is-surging-and-that-spells-trouble https://www.bloomberg.com/opinion/articles/2019-01-06/china-...
- socrates1998 7y agoGreat article. I worked at a Forex trading firm and this is a great way to explain China's dilemma. Really, this is kind of what happened to every other east Asian economy the past 60 years. They grow at a rapid pace for about two decades, then hit a ceiling as their low currency value becomes a hindrance rather than a benefit. Like the author explains, this is the Japanese model. And every country who has copied it as done so less effectively than the Japanese. First Japan, then Korea, then Taiwan, now China. For me, the fundamental advantage in this trade war with the US is that the Chinese are replaceable for the American economy. Sure, there will be some pains as companies move their factories from China to Vietnam (or wherever), but ultimately, there are other places in the world with cheap labor. There is no other America in the world. China's number one customer is America and China doesn't seem to realize this. If you don't keep your relationship good with your number one customer, then you will lose them eventually. And that's what's happening. The Chinese have to get better at international relations or they will be more isolated as time goes on. No one wants to deal with a partner who bullies them around. Especially when there are better deals on the table.
- andrewksl 7y agoCould you elaborate more on why you think China is being a bully, as opposed to responding to a trade war they didn’t start? Or why you think they don’t realize the nature of their relationship with the US?
- drak0n1c 7y agoChina has always had incredibly high tariffs on US goods, strict nationality limitations on investment and ownership, and many industry-wide bans that prevent US companies from even competing. Latest moves by the US, despite the bluster and media narrative, are essentially reciprocal and even with the latest hikes are still no where near the barriers that China imposes.
- bduerst 7y ago>China has always had incredibly high tariffs on US goods Before the trade war, which US goods had tariffs in China and how high were they?
- tareqak 7y agoOn the flip side, a lot of countries that the United States trades with peg their currencies to the US dollar. See the last section (Why Countries Peg Their Currency to the Dollar) of https://www.thebalance.com/what-is-a-peg-to-the-dollar-3305925 https://www.thebalance.com/what-is-a-peg-to-the-dollar-33059... and https://www.thebalance.com/what-is-a-petrodollar-3306358 https://www.thebalance.com/what-is-a-petrodollar-3306358 for details.
- tanilama 7y agoChina has surpassed US last year in terms of consumption of retail goods. China's advantage is no longer cheap labor TBH...It hasn't been cheap for a long time now. America is unique and important...But so is China.
- socrates1998 7y agoIf the Chinese protect their domestic market from American companies, then there is no point to staying on good terms with them. Look what happened to Google. Google made all these concessions to the CCP and still got fucked. China can't dangle the carrot of the Chinese market if they don't let American (or Japanese or European) companies have decent access to them. China teases access, then pushes out the company after they steal their technology and intellectual property. The world is finally wising up to this scam.
- tanilama 7y agoTrue. I think reciprocity is the key here. China needs to open up its market to the world for the benefits of every party in the world trade. It has enjoyed a long enough special treatment to use a lot of domestic excuses to perform various protectionist acts, which needs to stop now. But Google's case is a different one. They soured their relationship with China by themselves. I don't see how it is beneficial to be openly rebellious to local government in the market you wish to operates.
- socrates1998 7y ago"Soured their relationship" Really? Is that what you call letting the CCP filter search results? Google made far too many concessions in my opinion and still got fucked.
- RobertoG 7y agoSo, the Chinese are evil. Maybe, but then, there is nothing exceptional about their evil. If you are old enough you will remember when Japan were the evil one in the 80's. Or we can go to the history books and see how all those tactics is what the USA used against Britain.
- apo 7y ago> Firstly, China has devalued the yuan to offset the rising tariffs that the United States has been imposing. In fact, China has devalued the yuan significantly since the Trump administration first placed a 10% tariff on Chinese goods – effectively negating the tariffs. And with the new 10% tariffs that Trump has promised to imposed on a wider range of goods China has in response devalued their currency further. I keep seeing claims that China is devaluing without numbers or context. Here's a 10-year chart of the USD/CNY exchange rate: https://www.xe.com/currencycharts/?from=USD&to=CNY&view=10Y https://www.xe.com/currencycharts/?from=USD&to=CNY&view=10Y At the start of the current administration (Jan 2017), the rate stood at about 6.96. Today it stands at 7.04. In the two years after the 2016 election (April 2018), the yuan had strengthened to 6.28. According to this timeline, the first round of US tariffs hit on April 7, 2017. https://www.reuters.com/article/us-usa-trade-china-timeline/timeline-key-dates-in-the-us-china-trade-war-idUSKCN1UZ24U https://www.reuters.com/article/us-usa-trade-china-timeline/... From the announcement of the first round of tariffs, the yuan actually strengthened. It has only "weakened" in the last year, and then only back to a level that slightly exceeds that of Jan 2016. Yet to hear the president and others tell it, China is on a currency devaluation bender the likes of which the world has never seen. Well, I'm not seeing it at least. It seems that the 7.0 level was broadly seen as a line in the sand. But like all psychological levels, they rarely mean anything in the long term. The trend is clearly for more yuan weakness based on the chart alone. Perhaps we'll even see even massive devaluation. But so far that's just speculation. The chart tells a story of a massive bowl formation (strongest yuan point in Jan 2014) hinting at severe weakness ahead, but we're nowhere close to that at the moment.
- natpalmer1776 7y agoI see a lot of comments looking at this from a 'X vs Y' lens and are trying to paint China/USA/Trump/Whoever as a bully, victim, or some other emotional label. In this kind of situation, I think it is important to remember that there are not any 'bullies' and 'victims' Like most business, the rules of engagement are flexible dependent on those involved and their willingness to assume risk to gain a nominal advantage. Also like most businesses, the net outcome of increasing risk is not always in favor of the party taking the risk, however the net outcome is almost always in [someone's] favor. Thus, you can simplify the outcome of any risk into two categories: Internal Advantage & External Advantage. -- Note: I don't use the term "disadvantage" as I prefer to force myself to think of things from a advantage/standing perspective. Any loss on a countries' part is a direct result of another country gaining some relative advantage. "What is the inherent risk with Action [X], and who gains from it?" Now regarding the issue at hand, the recent moves between China & the United States: China is responding to the United States assuming a greater degree of risk, and corresponding reward, through recent tariff changes. They appear to be trying to mitigate the advantage the United States gained by their actions, and thus are responding as any rational party in this situation would by attempting to regain their original advantage. The value of the currencies is, while non-trivial from a macro-perspective, a non-issue compared to re-establishing a status quo of commerce volume and relative economic position. The question that remains now is whether the net advantages of either nation shifts as a result of this recent exchange.
- ggg3 7y agomakes you wonder if the tariff wars is simply a smoke screen to allow china to devalue the cnY while looking the victim instead of the offensive to the usD that it really is.
- ma2rten 7y agoSomething that I have been wondering about for a long time. Why is it considered to be a good thing to export more? It seems to me that if a country imports more than it exports, it is getting a good deal. It exports stuff and gets more stuff in return.
- ur-whale 7y agoAs long as you're doing this without incurring debt, then maybe.
- pascalxus 7y agoexporting more means you're earning relatively more money that can then be spent on assets. All spending is either on assets (property, equities, land, etc) or liabilities (cars, toys, clothes, etc). Assets are the key to wealth because assets make more money whereas liabilities cost you to loose money. Wealth begets more wealth because it grows based on compounding effects.
- ma2rten 7y agoThis makes sense for individuals, but how does this work for countries? Let's say the US were to export more stuff to China. Now American companies have more money to buy assets. If they use this money to buy assets in the US it would just cause inflation. The land prices go up, but the total amount of land owned stays the same. If they use the money to buy land in China, I am not sure that it would have much impact on the US economy.
- 1PlayerOne 7y ago"China bids up the price of the dollar relative to the yuan by buying dollars with yuan, and then sits on these dollars by purchasing U.S. treasuries with them" Is China printing yuan to buy dollars? I thought the USD was accumulated from payments (in dollars) from exports to the USA.
- simonebrunozzi 7y agoVery useful, in the context of this article, to see the details of the Eurozone trade balance, "Latest Eurostat data on international trade" [0]. The total surplus for the entire Eurozone is €20.6B. Noteworthy to look at the top countries by trade surplus, where Germany represents the 900-pound gorilla: Germany: +€111.9B Ireland: +€33.9B Netherlands: +€32.9B Italy: +€22.1B Czechia: +€10.8B Everybody else is either close to zero, or negative. Here's the worst ones: France: -€33.6B Spain: -€15.8B Greece: -€11.0B Portugal: -€10.3B [0]: https://trade.ec.europa.eu/doclib/docs/2013/december/tradoc_151969.pdf https://trade.ec.europa.eu/doclib/docs/2013/december/tradoc_...
- asabjorn 7y agoFinancial tools such as devaluing their currency as a tool in maintaining a non-reciprocal trading relationship demonstrates the challenges in working with China. If your marital partner or friend did the same you would probably be unhappy with them. For instance, giving you equal conditions in my market assume that you will do the same in yours and that you will not unfairly subsidize your businesses through market restrictions as well as financial instruments such as currency manipulation.
- mrb 7y ago«…an undervalued currency, by raising the cost of imports, acts as a kind of consumption tax for household and so reduces disposable household income. With lower disposable household income usually comes lower household consumption…the combination of lower consumption and higher production automatically causes a surge in the savings rate. And of course, this also acts as a subsidy to consumption for other countries whose currencies can now purchase additional imports.» The first paragraph is written by Michael Petteis. The second paragraph by the blog's author. That second paragraph is completely wrong. As Michael explains, an undervalued currency raises the cost of imports. Therefore it doesn't help "purchase additional imports".
- mediaman 7y agoAn undervalued currency raises the cost of imports into the country whose currency is undervalued. For other countries, it subsidizes imports from the country with the undervalued currency. He's not claiming that an undervalued currency helps that country purchase additional imports.
- mrb 7y agoAh I see, this makes sense. Thanks. I misunderstood the second paragraph.
- NTDF9 7y agoThis is the single biggest mistake every single emerging market has made in the past. Overleveraging on dollars. These countries need to realize that being in debt to a foreign currency is never worth it. The short-term booming economy because of a market flooded with dollars doesn't ever outweigh long-term costs. See: Argentina, Brazil
- qtplatypus 7y agoMany emerging markets don’t have enough capital to invest in infrastructure and businesses in order to build there economies. When done responsibly it’s a way to grow your economy.
- rehasu 7y agoDoes this strategy still work in a world with highest possibility of migration we ever had? If I live in a consumption repressed country and can see through the internet that the consumption rate is much better in other countries, I will also use my talent and resources to move to that country. Since I can build a network online, since I can investigate laws online, even of other countries, since I can book and prepay for different steps to take in migration I have a much easier time than ever before to simply go somewhere else. At the same time the psychological bonding between people and nations is lower than ever since the creation of nation states. If someone tells you they live at 20% the value they would want to live, just because they want to support their country, you would laugh about them. And last but not least, more and more succeeding in the competition of production talent and creativity is more important than anything else. E.g. a soldier with low IQ and lots of muscles might have been great 500 years ago. But nowadays he simply gets shredded by a drone that was constructed by a nerd with technical talents and zero muscles. Altogether it doesn't seem very logical to me that such a move can really improve China's situation, if it makes them lose talent quicker.
- known 7y agoElectric vehicles are still in nascent stage; https://twitter.com/spectatorindex/status/1129091646627274753 https://twitter.com/spectatorindex/status/112909164662727475... Till then everyday China need 504 million US$ to buy 8,400,000 bbl/day OPEC Oil to drive its economy; https://en.m.wikipedia.org/wiki/List_of_countries_by_oil_imports https://en.m.wikipedia.org/wiki/List_of_countries_by_oil_imp... and https://en.m.wikipedia.org/wiki/Petrocurrency#Currencies_used_to_trade_oil https://en.m.wikipedia.org/wiki/Petrocurrency#Currencies_use... Hence China is selling/exporting its products/services to USA to EARN that $504 million/day; https://twitter.com/spectatorindex/status/1161502709809238016 https://twitter.com/spectatorindex/status/116150270980923801...
- known 7y agoNot a single word about OPEC Oil in this article :(