8 ms·

Why is Xi Jinping building commodity stockpiles?

43 points by ianrahman 2y ago

tivert 2y ago
https://archive.is/yBWfy https://archive.is/yBWfy
deleted 2y ago
[deleted]
deleted 2y ago
[deleted]
alephnerd 2y ago
From TFA: Hedging against a potential trade war if Trump became president. "Now Mr Trump, who makes no secret of his desire to hobble China, has a decent chance of returning to power. In a confrontation, America could restrict its own food exports to China, which have rebounded since a truce of sorts was reached, and lean on other big suppliers such as Argentina and Brazil to do likewise. It could try to influence countries that sell metals to China, including Australia and Chile. And most of China’s commodity imports are shipped through a few straits and canals that America could seek to block for Chinese vessels by, say, posting military ships nearby. ... For now, the evidence suggests that hoarding is more likely to be a defensive measure, since it is not yet on a scale to be secure in a hot conflict" ---- Also, lots of people forget that Chinese who grew up in the 1990s tend to be fairly anti-American due to the Tiannamen Sanctions, the Taiwan Straits Crisis, and the bombing of the Chinese Embassy in Belgrade along with the Collapse of the USSR and the Gulf War (the Iraqi Army used the same doctrine and weaponry as the PLA in the 1990s). There is a massive culture gap between Chinese and American leadership, and it has the potential of spiraling into conflict if diplomacy and openness in the relationship isn't managed. Both sides think the other is out to get them.
- tivert 2y ago
  > Also, lots of people forget that Chinese who grew up in the 1990s tend to be fairly anti-American due to the Tiannamen Sanctions, the Taiwan Straits Crisis, and the bombing of the Chinese Embassy in Belgrade... Don't forget the propaganda around those things, which is an important factor. I was talking to a Chinese person about the bombing of the Chinese Embassy in Belgrade, and they were certain the US never apologized for it. However, they had to concede they had been mislead when I found a old C-SPAN clip of Clinton apologizing for it during a press conference. I bet Chinese media around that time deliberately cultivated outrage by selectively reporting on the bombing but ignoring the apology.
  - throw310822 2y ago
    Given what the gp is talking about- colluding with many major suppliers to stop food and commodities exports to China, and even blocking sea passages to prevent shipments from reaching them (an act of war)- I don't see why Chinese people need any propaganda to hate the US. Reality is more than enough.
    - qwytw 2y ago
      > colluding with many major suppliers to stop food and commodities exports to China > Reality is more than enough Except it's all hypothetical?
      - throw310822 2y ago
        True, but how would the US feel about a country throwing around the possibility of cutting them off of global supplies and even blocking their shipping routes? Do you think US citizens would feel good towards such a country? Not to mention that of course the US have been waging a commercial war with China already for several years.
        qwytw 2y ago
        > but how would the US feel about a country You mean about anonymous individuals (who might or might not be citizens of that given country) throwing around that idea on an online forum? But I'll try not being facetious. I do of course understand your point, even if I do think you overdramatizing it. Yes US has been waging a commercial war with China, just like China was waging a war with the US. I don't really see how is the US the clear aggressor here (of course it mainly has itself to blame for entering into this unsustainable relationship with China to begin with; however I still strongly believe that in relative terms China benefited significantly more from US/rest of the developed outsourcing much of their industrial/etc. production to China than the other way around, though). And obviously China is a clear aggressor in certain aspects (e.g. how would as British citizen if Germany/France/etc. started threatening to invade your island over Brexit?). If that's not a good analogy we could use Ireland and Britain instead. > possibility of cutting them off of global supplies and even blocking their shipping routes Anyway, this is sounds extremely far fetched. Orthogonal to what the US was and is still doing; I don't think any country did more to keep global shipping routes open for the 50+ years or so. Blockading China would be the equivalent of purposefully shutting yourself in the gut (even if we ignore any potential military reaction)
- linearrust 2y ago
  [flagged]
  - alephnerd 2y ago
    > I'd imagine those who grew up before 1990s and after aren't fans either. What India became for the US in the 2010s is what China was for the US in the 70s and 80s - a regional power to help blunt a major competitor. Nixon's detente with China was done in order to blunt the USSR - with whom China had a border conflict that almost turned into a war in 1968 (sound familiar?) American soldiers were even posted in Xinjiang and Inner Mongolia manning signals collection stations aimed at the USSR, and the US and China began technology transfers and shared research in the 1980s with the signing of the US-China Science and Technology Pact in 1979. The US-China relationship collapsed with the fall of the USSR, as that was the primary impetus for relations.
    - linearrust 2y ago
      [flagged]
  - blackhawkC17 2y ago
    Who are these invisible elites you speak of? I won’t be surprised if you mention the fictional “deep state.”
  - mint2 2y ago
    > Imagine people being dumb enough to believe that matters of geopolitical importance is determined by elected officials. Especially a 'reality star' like trump. Thanks for calling me dumb for thinking the POTUS has influence. Anyway, Speak for yourself, I can’t imagine being so far down the deep state rabbit hole to think the president and commander in chief is purely a vapid figurehead. Question: did you try to correct people when you saw them criticizing Biden or Trump for the Afghanistan pull out, since according to your comment they had nothing to do with it.
    - linearrust 2y ago
dist-epoch 2y ago
They have mountains of dollars which could suddenly be frozen like Russia's dollars were. Much better to exchange them for something useful.
- elzbardico 2y ago
  Or that could become suddenly a lot less valuable due to a US treasury default.
tivert 2y ago
IMHO, stockpiles are good policy since they build resilience. If China's doing this but not the West, it's a display of some of the advantages of their governance model (not to say that it doesn't have disadvantages, too). The US especially seems to be infected by short-term, happy-path thinking that's eager and willing to risk the future for a little bit of savings today.
- Carrok 2y ago
  You don’t think the west has stockpiles?
  - perihelions 2y ago
    The US burned half of its stockpile in the last four years[0], as a (politically popular!) counter to inflation. It's as the parent comment says: we're presently infected by short-term thinking, exchanging gigantic risks in the future for small benefits in the present. [0] https://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(United_States)#/media/File:US_Strategic_Petroleum_Reserve.webp https://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(U...
    - mupuff1234 2y ago
      A large surge in inflation seems like a decent time to use the stockpiles - it's not like they can't be replenished. Especially given that the US is an exporter of energy.
    - bdjsiqoocwk 2y ago
      Damn I hate it when it turns out a Republican talking point had some truth to it.
    - qwytw 2y ago
      Wouldn't even at peak levels (700mil) the total reserve be enough for just ~35 days or so? Of course that's still a lot but I'm not sure if 300 million barrels over a couple of years could affect prices that much. Also it kind of made sense to sell when the price was so high and fill it up later.
jncfhnb 2y ago
A part of it is probably just great prices on Russian oil
- red-iron-pine 2y ago
  and 25% markups on everything else. housing bubble is also looking shaky, so build up reserves of stuff now so that if things get weird you can offload some of the reserve to stabilize prices and help recover. also useful if/when China feels a need to invade Taiwan, an increasingly likely prospect.
j7ake 2y ago
Because commodities are cheap these days, why wait for the next commodities boom to buy when you can buy now on sale?
- epoxia 2y ago
  "Instead, China appears to be stockpiling materials at a rapid pace—and at a time when commodities are expensive." 2nd paragraph in the article disagrees.
TomK32 2y ago
Xi the grab hag https://en.wiktionary.org/wiki/grab_hag https://en.wiktionary.org/wiki/grab_hag I couldn't read whether those additional 16% last year (after a pandemic and the unexpected 3-day SMO by Ruzzia in 2022) are just a fluke or way above the e.g 2014-2019 average. Also, how much of those 16% are cheap Ruzzia oil? The drop this year could be explained with Ukraine's successful campaign on Ruzzia's refineries and export bans on some oil products that already have been extended beyond the harvest season. Are we sure China is intentionally building up stockpiles or it is accidentally because it's not able to shift imported raw materials into its stuttering economy? Just picking one commodity here: Gas of which China now has 23 days worth of storage is ridiculously small compared to the whole year that Austria has in it's storage. Other players like the US have even more natural gas stored, in it's natural habitat below earth and not in facilities that are easy targets for modern missiles. I understand the danger of mainland China attacking the Republic of China, but it would be much more suicidal for China than Ruzzia's attack on Taiwan. Argentina is mentioned in the article, they plan to drop their own currency for the US dollar, thus no action against the will of Washington will happen.
glass1122 2y ago
"Vast new holdings of grain, natural gas and oil suggest trouble ahead",The economist try to portray as if it's bad thing. you can print as much as money you want or simply generate in computer, but commodities are useful items. China is doing the right thing.

43 points by ianrahman 2y ago

tivert 2y ago

https://archive.is/yBWfy https://archive.is/yBWfy

deleted 2y ago

[deleted]

deleted 2y ago

[deleted]

alephnerd 2y ago

From TFA: Hedging against a potential trade war if Trump became president. "Now Mr Trump, who makes no secret of his desire to hobble China, has a decent chance of returning to power. In a confrontation, America could restrict its own food exports to China, which have rebounded since a truce of sorts was reached, and lean on other big suppliers such as Argentina and Brazil to do likewise. It could try to influence countries that sell metals to China, including Australia and Chile. And most of China’s commodity imports are shipped through a few straits and canals that America could seek to block for Chinese vessels by, say, posting military ships nearby. ... For now, the evidence suggests that hoarding is more likely to be a defensive measure, since it is not yet on a scale to be secure in a hot conflict" ---- Also, lots of people forget that Chinese who grew up in the 1990s tend to be fairly anti-American due to the Tiannamen Sanctions, the Taiwan Straits Crisis, and the bombing of the Chinese Embassy in Belgrade along with the Collapse of the USSR and the Gulf War (the Iraqi Army used the same doctrine and weaponry as the PLA in the 1990s). There is a massive culture gap between Chinese and American leadership, and it has the potential of spiraling into conflict if diplomacy and openness in the relationship isn't managed. Both sides think the other is out to get them.

tivert 2y ago
> Also, lots of people forget that Chinese who grew up in the 1990s tend to be fairly anti-American due to the Tiannamen Sanctions, the Taiwan Straits Crisis, and the bombing of the Chinese Embassy in Belgrade... Don't forget the propaganda around those things, which is an important factor. I was talking to a Chinese person about the bombing of the Chinese Embassy in Belgrade, and they were certain the US never apologized for it. However, they had to concede they had been mislead when I found a old C-SPAN clip of Clinton apologizing for it during a press conference. I bet Chinese media around that time deliberately cultivated outrage by selectively reporting on the bombing but ignoring the apology.
- throw310822 2y ago
  Given what the gp is talking about- colluding with many major suppliers to stop food and commodities exports to China, and even blocking sea passages to prevent shipments from reaching them (an act of war)- I don't see why Chinese people need any propaganda to hate the US. Reality is more than enough.
  - qwytw 2y ago
    > colluding with many major suppliers to stop food and commodities exports to China > Reality is more than enough Except it's all hypothetical?
    - throw310822 2y ago
      True, but how would the US feel about a country throwing around the possibility of cutting them off of global supplies and even blocking their shipping routes? Do you think US citizens would feel good towards such a country? Not to mention that of course the US have been waging a commercial war with China already for several years.
      - qwytw 2y ago
        > but how would the US feel about a country You mean about anonymous individuals (who might or might not be citizens of that given country) throwing around that idea on an online forum? But I'll try not being facetious. I do of course understand your point, even if I do think you overdramatizing it. Yes US has been waging a commercial war with China, just like China was waging a war with the US. I don't really see how is the US the clear aggressor here (of course it mainly has itself to blame for entering into this unsustainable relationship with China to begin with; however I still strongly believe that in relative terms China benefited significantly more from US/rest of the developed outsourcing much of their industrial/etc. production to China than the other way around, though). And obviously China is a clear aggressor in certain aspects (e.g. how would as British citizen if Germany/France/etc. started threatening to invade your island over Brexit?). If that's not a good analogy we could use Ireland and Britain instead. > possibility of cutting them off of global supplies and even blocking their shipping routes Anyway, this is sounds extremely far fetched. Orthogonal to what the US was and is still doing; I don't think any country did more to keep global shipping routes open for the 50+ years or so. Blockading China would be the equivalent of purposefully shutting yourself in the gut (even if we ignore any potential military reaction)
linearrust 2y ago
[flagged]
- alephnerd 2y ago
  > I'd imagine those who grew up before 1990s and after aren't fans either. What India became for the US in the 2010s is what China was for the US in the 70s and 80s - a regional power to help blunt a major competitor. Nixon's detente with China was done in order to blunt the USSR - with whom China had a border conflict that almost turned into a war in 1968 (sound familiar?) American soldiers were even posted in Xinjiang and Inner Mongolia manning signals collection stations aimed at the USSR, and the US and China began technology transfers and shared research in the 1980s with the signing of the US-China Science and Technology Pact in 1979. The US-China relationship collapsed with the fall of the USSR, as that was the primary impetus for relations.
  - linearrust 2y ago
    [flagged]
- blackhawkC17 2y ago
  Who are these invisible elites you speak of? I won’t be surprised if you mention the fictional “deep state.”
- mint2 2y ago
  > Imagine people being dumb enough to believe that matters of geopolitical importance is determined by elected officials. Especially a 'reality star' like trump. Thanks for calling me dumb for thinking the POTUS has influence. Anyway, Speak for yourself, I can’t imagine being so far down the deep state rabbit hole to think the president and commander in chief is purely a vapid figurehead. Question: did you try to correct people when you saw them criticizing Biden or Trump for the Afghanistan pull out, since according to your comment they had nothing to do with it.
  - linearrust 2y ago

dist-epoch 2y ago

They have mountains of dollars which could suddenly be frozen like Russia's dollars were. Much better to exchange them for something useful.

elzbardico 2y ago
Or that could become suddenly a lot less valuable due to a US treasury default.

tivert 2y ago

IMHO, stockpiles are good policy since they build resilience. If China's doing this but not the West, it's a display of some of the advantages of their governance model (not to say that it doesn't have disadvantages, too). The US especially seems to be infected by short-term, happy-path thinking that's eager and willing to risk the future for a little bit of savings today.

Carrok 2y ago
You don’t think the west has stockpiles?
- perihelions 2y ago
  The US burned half of its stockpile in the last four years[0], as a (politically popular!) counter to inflation. It's as the parent comment says: we're presently infected by short-term thinking, exchanging gigantic risks in the future for small benefits in the present. [0] https://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(United_States)#/media/File:US_Strategic_Petroleum_Reserve.webp https://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(U...
  - mupuff1234 2y ago
    A large surge in inflation seems like a decent time to use the stockpiles - it's not like they can't be replenished. Especially given that the US is an exporter of energy.
  - bdjsiqoocwk 2y ago
    Damn I hate it when it turns out a Republican talking point had some truth to it.
  - qwytw 2y ago
    Wouldn't even at peak levels (700mil) the total reserve be enough for just ~35 days or so? Of course that's still a lot but I'm not sure if 300 million barrels over a couple of years could affect prices that much. Also it kind of made sense to sell when the price was so high and fill it up later.

jncfhnb 2y ago

A part of it is probably just great prices on Russian oil

red-iron-pine 2y ago
and 25% markups on everything else. housing bubble is also looking shaky, so build up reserves of stuff now so that if things get weird you can offload some of the reserve to stabilize prices and help recover. also useful if/when China feels a need to invade Taiwan, an increasingly likely prospect.

j7ake 2y ago

Because commodities are cheap these days, why wait for the next commodities boom to buy when you can buy now on sale?

epoxia 2y ago
"Instead, China appears to be stockpiling materials at a rapid pace—and at a time when commodities are expensive." 2nd paragraph in the article disagrees.

TomK32 2y ago

Xi the grab hag https://en.wiktionary.org/wiki/grab_hag https://en.wiktionary.org/wiki/grab_hag I couldn't read whether those additional 16% last year (after a pandemic and the unexpected 3-day SMO by Ruzzia in 2022) are just a fluke or way above the e.g 2014-2019 average. Also, how much of those 16% are cheap Ruzzia oil? The drop this year could be explained with Ukraine's successful campaign on Ruzzia's refineries and export bans on some oil products that already have been extended beyond the harvest season. Are we sure China is intentionally building up stockpiles or it is accidentally because it's not able to shift imported raw materials into its stuttering economy? Just picking one commodity here: Gas of which China now has 23 days worth of storage is ridiculously small compared to the whole year that Austria has in it's storage. Other players like the US have even more natural gas stored, in it's natural habitat below earth and not in facilities that are easy targets for modern missiles. I understand the danger of mainland China attacking the Republic of China, but it would be much more suicidal for China than Ruzzia's attack on Taiwan. Argentina is mentioned in the article, they plan to drop their own currency for the US dollar, thus no action against the will of Washington will happen.

glass1122 2y ago

"Vast new holdings of grain, natural gas and oil suggest trouble ahead",The economist try to portray as if it's bad thing. you can print as much as money you want or simply generate in computer, but commodities are useful items. China is doing the right thing.