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An escalation here to other sectors could be deadly for the US, who have what, like 2/3 of their manufacturing done in China? Sure China industry would lose t

An escalation here to other sectors could be deadly for the US, who have what, like 2/3 of their manufacturing done in China? Sure China industry would lose their customer base, but definitely not as leveraged as the US

indoclay 2y ago
US imports from China is ~2% of US GDP and largely in electronics [0], which are actively being targeted for sanctions. It will be painful but not catastrophic for the US to "de-risk". China has to import both energy and food to sustain it's economy and population[1, 2]. There is very little domestic consumption to absorb their own production capacity and western countries are actively blocking their markets, like the EV situation in Europe or electronics with the US. They have a very bleak demographic picture with a massively aging population along with some of the lowest fertility rates in the world[3]. It is odd to think of China as running out of people[4], but there will be two elder dependents for every working age person very soon. There is an expectation of a full on collapse coming and local governments there are already $100TN+ in debt collectively[5]. If there was a pivot possible, would anyone provide that capital with what is happening with the Evergrande liquidation where foreign capital is the first to get wiped out? Any company that hasn't pivoted to India or some other SEA country for manufacturing will simply be left behind. [0] https://www.visualcapitalist.com/visualized-ranking-the-goods-most-traded-between-the-us-and-china/ https://www.visualcapitalist.com/visualized-ranking-the-good... [1] https://www.cfr.org/article/china-increasingly-relies-imported-food-thats-problem https://www.cfr.org/article/china-increasingly-relies-import... [2] https://www.eia.gov/todayinenergy/detail.php?id=61843 https://www.eia.gov/todayinenergy/detail.php?id=61843 [3] https://www.worldometers.info/demographics/china-demographics/ https://www.worldometers.info/demographics/china-demographic... [4] https://jonathanrileywriter.medium.com/chinese-demographic-data-population-collapse-245d01d70dbe https://jonathanrileywriter.medium.com/chinese-demographic-d... [5] https://www.wsj.com/world/china/chinas-colossal-hidden-debt-problem-is-coming-to-a-head-83a34dc0 https://www.wsj.com/world/china/chinas-colossal-hidden-debt-...
audunw 2y ago
Even Chinese companies are moving their manufacturing out to countries like Mexico and Vietnam. Samsung has moved all their manufacturing out of China. China themselves do not want to get stuck just doing manufacturing. Though I suspect in their attempt to move up the value chain they’re just shooting themselves in the foot.

indoclay 2y ago

US imports from China is ~2% of US GDP and largely in electronics [0], which are actively being targeted for sanctions. It will be painful but not catastrophic for the US to "de-risk". China has to import both energy and food to sustain it's economy and population[1, 2]. There is very little domestic consumption to absorb their own production capacity and western countries are actively blocking their markets, like the EV situation in Europe or electronics with the US. They have a very bleak demographic picture with a massively aging population along with some of the lowest fertility rates in the world[3]. It is odd to think of China as running out of people[4], but there will be two elder dependents for every working age person very soon. There is an expectation of a full on collapse coming and local governments there are already $100TN+ in debt collectively[5]. If there was a pivot possible, would anyone provide that capital with what is happening with the Evergrande liquidation where foreign capital is the first to get wiped out? Any company that hasn't pivoted to India or some other SEA country for manufacturing will simply be left behind. [0] https://www.visualcapitalist.com/visualized-ranking-the-goods-most-traded-between-the-us-and-china/ https://www.visualcapitalist.com/visualized-ranking-the-good... [1] https://www.cfr.org/article/china-increasingly-relies-imported-food-thats-problem https://www.cfr.org/article/china-increasingly-relies-import... [2] https://www.eia.gov/todayinenergy/detail.php?id=61843 https://www.eia.gov/todayinenergy/detail.php?id=61843 [3] https://www.worldometers.info/demographics/china-demographics/ https://www.worldometers.info/demographics/china-demographic... [4] https://jonathanrileywriter.medium.com/chinese-demographic-data-population-collapse-245d01d70dbe https://jonathanrileywriter.medium.com/chinese-demographic-d... [5] https://www.wsj.com/world/china/chinas-colossal-hidden-debt-problem-is-coming-to-a-head-83a34dc0 https://www.wsj.com/world/china/chinas-colossal-hidden-debt-...

audunw 2y ago

Even Chinese companies are moving their manufacturing out to countries like Mexico and Vietnam. Samsung has moved all their manufacturing out of China. China themselves do not want to get stuck just doing manufacturing. Though I suspect in their attempt to move up the value chain they’re just shooting themselves in the foot.