5 ms·
Capital is only safe in the US if you respect it's economic, technological, and military primacy. Ask Russia or Iran if they would be willing to store their wea
by magicsmoke 6y ago
Capital is only safe in the US if you respect it's economic, technological, and military primacy. Ask Russia or Iran if they would be willing to store their wealth in the US. Iran's on a permanent blacklist for nationalising US economic interests and challenging American military influence in the middle East, and Russia too for daring to use its military on Ukraine in a world where only the US has the prerogative to invade other countries.
China's different from those two in that they've been exceptionally careful not to spark a shooting war and to keep enough profits flowing to US companies for the past few decades to keep them placated. But now China's shaking off the leash by building up an indigenous high tech ecosystem that can challenge the US and trying to be the dominant military power in East Asia. Any country that challenges the US can expect its wealth confiscated.
Don't expect the current situation to defuse anytime soon. China's goal to be technologically independent eats into the profit margins and future R&D expenditures of US high tech industries, and China's goal to be the military leader of East Asia threatens America's post WW2 influence over Japan, South Korea, Taiwan, and the Philippines. Both countries want what they believe to be their fair share of the world, but the sum adds up to more than 100%. Both countries also believe they'll be the winner in the end. What better powderkeg could you ask for? Someone will have to give ground at the negotiating table eventually, but that'll only happen when both sides agree on what the actual balance of power between them is and it might take a war to find out.
- fermienrico 6y agoI read somewhere that it is difficult to get money out of China if you set up a business there, BMW/VW have been denied withdrawal of funds from China since 2016. At that rate, China seems like a pretty poor place to put your money. Doesn't matter if their domestic technological pace is impressive. Can anyone honestly think that in 10 years, they would trust the CCP enough to buy property or invest there?
- yomly 6y agoI would happily take that risk if I could get exposure to the shenzhen property market...
- powerapple 6y agoUS and China are both safe to invest if you ask me. Their economies are big and militarily strong. I would put some money in both countries.
- uranusjr 6y agoThe difference is how you consider money on the paper. The problem with China is that you are limited in how you can spend the money you put there; if one of the choices they give suits you, great; otherwise it would be a very bad idea since it would only continue to get harder to make use of the “safe” assets you “own”.
- magicsmoke 6y agoBig reason why the USD is still the world's reserve currency despite China being the bigger trading partner for many countries. The US is willing to let allied countries play freely in its financial markets and economy, China's not as generous. Frankly, if you have to pick between being aligned with the US or China the US gives more goodies away than China does. Full access to US markets, military umbrella, and no obnoxious sense of inherent superiority over smaller countries that's displayed overtly. The only benefit to allying with China is that China doesn't demand political reform. Everything else is very meh, especially if you're already using America's preferred political system.