5 ms·

I’m sure they will throw tons of money at this. Failure to be able to make chips is national suicide for a major world power.

pragmomm 2y ago
China is really really broke, from central government, to local government, to enterprise, to individuals. from 11 trillion off the book debts for local governments, to record number of Chinese blacklisted for debt defaults. from 7 trillion lost in stock market value in 3 years, to close to 20 trillion wealth wiped out in real estate.
- XorNot 2y ago
  Authoritarian accounting follows the mafia gamblers playbook: make big bets and threaten anyone who tries to collect on the losses.
- nothercastle 2y ago
  Entities in the government are broke so there will need to be a clearing event. What better way to restructure debt than a war? China is extremely rich in mid grade mfg capabilities, and would be able to create a large quantity of good enough weapons to successfully execute such an endeavor.
  - pragmomm 2y ago
    China's debt is mostly internal, not external. It doesn't need a war to restructure debt. However, it does need to pay out an increasing amount of social pensions to its aging population, maintain its increasingly expensive and decreasingly utilized rail infrastructure, fund its growing state enterprises, and maintain its increasing military endeavors, etc. In other words, China's debt is owed to the citizens, but it now lacks the ability to pay them due to collapsing revenue from real estate. It could try to print massively, but then its cash will be toilet paper, and for a country that mainly imports its resources, that would be devastating. So right now it's just printing quietly and in small doses. War would make yuan worthless overnight.
    - Jensson 2y ago
      > It could try to print massively, but then its cash will be toilet paper, and for a country that mainly imports its resources, that would be devastating China is currently running a massive trade surplus, they could print a ton and still be fine.
      - pragmomm 2y ago
        Not enough, especially with the increasing trade sanctions and tariffs coming from every other country against China. There's a reason why there are Chinese state employees not having been paid for 8 months, or Chinese citizens unable to withdraw a few hundred dollars from state banks. There was some talk of Shanghai proposing a new rejuvenation tax for residential buildings this summer. The backlash was so great, that the government quietly backtracked.
        Jensson 2y ago
        How do you know they can't print enough when they haven't tried printing money? They could print and thus increase internal consumption until they have a zero trade balance, which would help a lot of their issues, it is unclear how much but it would help.
        pragmomm 2y ago
        China has been printing money since 2009. thus the 11 trillion off the book debts for local governments.
        kredd 2y ago
        That’s 15 years. Why not for another 15 years? I mean eventually things might crash, but as the saying goes, “economists have predicted 9 out of last 5 recessions”.
        pragmomm 2y ago
  - ronsor 2y ago
    > What better way to restructure debt than a war? This is what concerns me. War has often been used as a distraction from domestic issues.
    - nothercastle 2y ago
      It worked way better than anyone would have expected for Russia so I’m sure others took notice
      - PixyMisa 2y ago
        It worked so well that there's now a major combat front inside Russia.
    - newuser94303 2y ago
      Way more concerned about the US starting a new war to force China to buy some US crap.
      - ronsor 2y ago
        Why would that happen when the US has been preventing its companies from selling to China?
- culi 2y ago
  Isn't the US' debt almost twice as high as China's?
  - seanmcdirmid 2y ago
    It depends if you include SOE debt as a part of China's national debt or not. One thinking is that SOEs are almost private companies, but everyone assumes their loans are backed by local governments at least. Kind of a mess when you try to sort out what is private and public in China's debt. Should the debt of state owned railroads who heavily bond out the development of the HSR network be counted as public debt, or private debt since it is held by private entities? Considering that default is still a possibility (only BJ - SH is profitable), the government will probably have to transfer these to public debt eventually (or alternatively tell lots of private chinese citizens their retirement is SOL).
    - culi 2y ago
      When talking about national debt we include both private and public debt. By this measure China's debt stands at around $45 trillion while the US' stands at around $70 trillion. China also has a larger GDP (PPP) and 4.25x the population. However you spin it, you'd be hard pressed to defend the claim that China is facing a worse debt crisis than the US is
      - seanmcdirmid 2y ago
        China has a smaller GDP, if you want to talk about PPP yuan then you need to talk about PPP debt, otherwise it isn't meaningful. As for your wonky definition of national debt: https://en.wikipedia.org/wiki/National_debt_of_the_United_States https://en.wikipedia.org/wiki/National_debt_of_the_United_St... Maybe you are using a different chinese definition? If so, we are comparing apples and oranges. By the English definition of national debt, China should be pretty good since most debt in China is offloaded to localities or SOEs, or are hidden off books in some weird local lending scheme far away from Beijing.
      - m101 2y ago
        A debt crisis will be triggered by lack of confidence, and in that regard China's debt crisis is far worse than that of the US.
- bamboozled 2y ago
  I hear this a lot, I hear it about Russia too, but it also just feels like wishful thinking, it's really hard to know what the reality is, but I guess that's how authoritarian countries work.
  - bubaumba 2y ago
    If you go to Russia you'll hear the same about rotting Europe and USA. If you bother checking old news it was going on for more than hundred years. Imperialists are still alive, so will be China, don't worry. But, if it will be a nice shock for the rest if they take Taiwan...
- skybrian 2y ago
  I'm wondering how to think about debt load in China. If asset prices are too high, they will go down. When a debt defaults, someone doesn't have as much money as they thought they had. This is deflationary. Meanwhile, the government can print money or raise taxes if they need to. What are their real (rather than financial) constraints?
  - fancl20 2y ago
    If you borrow in your own currency there's no real constraints. The trade-off is fiscal deficit = printing money and may cause inflation. Then higher interest rates will put pressure on economic growth.
- gscott 2y ago
  I am not sure if being broke is important or not. They have created a dependency on themselves with the belt and road countries to where they have to buy Chinese products. China is doing currency swaps and lending in their own currency that countries then use to buy from China. Normally if you have a massive housing crises, jobs crises, debt crises, etc you would completely fail. But yet China keeps going. I believe they have captured a large group of forced consumers to prop up the Chinese government. Africans are not looking for the latest tech they just need things that work good enough. The US can not serve all of these markets (at a reasonable price point) so the Chinese companies dominate which feeds back up to the CCP staying in power.
- tivert 2y ago
  > China is really really broke, from central government, to local government, to enterprise, to individuals. from 11 trillion off the book debts for local governments, to record number of Chinese blacklisted for debt defaults. from 7 trillion lost in stock market value in 3 years, to close to 20 trillion wealth wiped out in real estate. Those all seem like things that would be really, really important to someone so immersed in the assumptions of the Western capitalist system that they've confused them for the laws of nature. But I'm not convinced they'd be so constraining for China.
bamboozled 2y ago
Can America make chips? Honest question.
- throawayonthe 2y ago
  [dead]
- mgiampapa 2y ago
  Intel still has fabs in the US, TSMC is building more fabs in the US. TI also makes chips in the us. The capability is there, but it's also interlinked with a global supply chain for silicon and other things. So can the west make chips without TSMC? Yes. Very much so. Can the US make chips on their own, in a more limited way.
- lupusreal 2y ago
  Is that really an honest question? Because it looks like a setup for some trollish "hurr Intel doesn't count because they're stinky" nonsense. Yes, America makes chips. Always has and never stopped. Even of you don't like Intel, America's chip production is obviously sufficient for national security intents and purposes.
- ta988 2y ago
  Intel is struggling, TSMC found it extremely difficult to set operations there, that doesn't smell good. For >20nm chips sure, for bleeding edge that's yet to see.
  - acchow 2y ago
    20nm? TSMC’s N4 plant in Arizona is set to be fully operational this year. There was a delay, and then their schedule was accelerated. https://www.emsnow.com/tsmcs-us-fab-reportedly-eyeing-for-early-mass-production/ https://www.emsnow.com/tsmcs-us-fab-reportedly-eyeing-for-ea... N3 is still a few years out (seems to be 2028)
    - ta988 2y ago
      Oh great so it finally moved. Glad to hear that.

pragmomm 2y ago

China is really really broke, from central government, to local government, to enterprise, to individuals. from 11 trillion off the book debts for local governments, to record number of Chinese blacklisted for debt defaults. from 7 trillion lost in stock market value in 3 years, to close to 20 trillion wealth wiped out in real estate.

XorNot 2y ago
Authoritarian accounting follows the mafia gamblers playbook: make big bets and threaten anyone who tries to collect on the losses.
nothercastle 2y ago
Entities in the government are broke so there will need to be a clearing event. What better way to restructure debt than a war? China is extremely rich in mid grade mfg capabilities, and would be able to create a large quantity of good enough weapons to successfully execute such an endeavor.
- pragmomm 2y ago
  China's debt is mostly internal, not external. It doesn't need a war to restructure debt. However, it does need to pay out an increasing amount of social pensions to its aging population, maintain its increasingly expensive and decreasingly utilized rail infrastructure, fund its growing state enterprises, and maintain its increasing military endeavors, etc. In other words, China's debt is owed to the citizens, but it now lacks the ability to pay them due to collapsing revenue from real estate. It could try to print massively, but then its cash will be toilet paper, and for a country that mainly imports its resources, that would be devastating. So right now it's just printing quietly and in small doses. War would make yuan worthless overnight.
  - Jensson 2y ago
    > It could try to print massively, but then its cash will be toilet paper, and for a country that mainly imports its resources, that would be devastating China is currently running a massive trade surplus, they could print a ton and still be fine.
    - pragmomm 2y ago
      Not enough, especially with the increasing trade sanctions and tariffs coming from every other country against China. There's a reason why there are Chinese state employees not having been paid for 8 months, or Chinese citizens unable to withdraw a few hundred dollars from state banks. There was some talk of Shanghai proposing a new rejuvenation tax for residential buildings this summer. The backlash was so great, that the government quietly backtracked.
      - Jensson 2y ago
        How do you know they can't print enough when they haven't tried printing money? They could print and thus increase internal consumption until they have a zero trade balance, which would help a lot of their issues, it is unclear how much but it would help.
        pragmomm 2y ago
        China has been printing money since 2009. thus the 11 trillion off the book debts for local governments.
        kredd 2y ago
        That’s 15 years. Why not for another 15 years? I mean eventually things might crash, but as the saying goes, “economists have predicted 9 out of last 5 recessions”.
        pragmomm 2y ago
- ronsor 2y ago
  > What better way to restructure debt than a war? This is what concerns me. War has often been used as a distraction from domestic issues.
  - nothercastle 2y ago
    It worked way better than anyone would have expected for Russia so I’m sure others took notice
    - PixyMisa 2y ago
      It worked so well that there's now a major combat front inside Russia.
  - newuser94303 2y ago
    Way more concerned about the US starting a new war to force China to buy some US crap.
    - ronsor 2y ago
      Why would that happen when the US has been preventing its companies from selling to China?
culi 2y ago
Isn't the US' debt almost twice as high as China's?
- seanmcdirmid 2y ago
  It depends if you include SOE debt as a part of China's national debt or not. One thinking is that SOEs are almost private companies, but everyone assumes their loans are backed by local governments at least. Kind of a mess when you try to sort out what is private and public in China's debt. Should the debt of state owned railroads who heavily bond out the development of the HSR network be counted as public debt, or private debt since it is held by private entities? Considering that default is still a possibility (only BJ - SH is profitable), the government will probably have to transfer these to public debt eventually (or alternatively tell lots of private chinese citizens their retirement is SOL).
  - culi 2y ago
    When talking about national debt we include both private and public debt. By this measure China's debt stands at around $45 trillion while the US' stands at around $70 trillion. China also has a larger GDP (PPP) and 4.25x the population. However you spin it, you'd be hard pressed to defend the claim that China is facing a worse debt crisis than the US is
    - seanmcdirmid 2y ago
      China has a smaller GDP, if you want to talk about PPP yuan then you need to talk about PPP debt, otherwise it isn't meaningful. As for your wonky definition of national debt: https://en.wikipedia.org/wiki/National_debt_of_the_United_States https://en.wikipedia.org/wiki/National_debt_of_the_United_St... Maybe you are using a different chinese definition? If so, we are comparing apples and oranges. By the English definition of national debt, China should be pretty good since most debt in China is offloaded to localities or SOEs, or are hidden off books in some weird local lending scheme far away from Beijing.
    - m101 2y ago
      A debt crisis will be triggered by lack of confidence, and in that regard China's debt crisis is far worse than that of the US.
bamboozled 2y ago
I hear this a lot, I hear it about Russia too, but it also just feels like wishful thinking, it's really hard to know what the reality is, but I guess that's how authoritarian countries work.
- bubaumba 2y ago
  If you go to Russia you'll hear the same about rotting Europe and USA. If you bother checking old news it was going on for more than hundred years. Imperialists are still alive, so will be China, don't worry. But, if it will be a nice shock for the rest if they take Taiwan...
skybrian 2y ago
I'm wondering how to think about debt load in China. If asset prices are too high, they will go down. When a debt defaults, someone doesn't have as much money as they thought they had. This is deflationary. Meanwhile, the government can print money or raise taxes if they need to. What are their real (rather than financial) constraints?
- fancl20 2y ago
  If you borrow in your own currency there's no real constraints. The trade-off is fiscal deficit = printing money and may cause inflation. Then higher interest rates will put pressure on economic growth.
gscott 2y ago
I am not sure if being broke is important or not. They have created a dependency on themselves with the belt and road countries to where they have to buy Chinese products. China is doing currency swaps and lending in their own currency that countries then use to buy from China. Normally if you have a massive housing crises, jobs crises, debt crises, etc you would completely fail. But yet China keeps going. I believe they have captured a large group of forced consumers to prop up the Chinese government. Africans are not looking for the latest tech they just need things that work good enough. The US can not serve all of these markets (at a reasonable price point) so the Chinese companies dominate which feeds back up to the CCP staying in power.
tivert 2y ago
> China is really really broke, from central government, to local government, to enterprise, to individuals. from 11 trillion off the book debts for local governments, to record number of Chinese blacklisted for debt defaults. from 7 trillion lost in stock market value in 3 years, to close to 20 trillion wealth wiped out in real estate. Those all seem like things that would be really, really important to someone so immersed in the assumptions of the Western capitalist system that they've confused them for the laws of nature. But I'm not convinced they'd be so constraining for China.

bamboozled 2y ago

Can America make chips? Honest question.

throawayonthe 2y ago
[dead]
mgiampapa 2y ago
Intel still has fabs in the US, TSMC is building more fabs in the US. TI also makes chips in the us. The capability is there, but it's also interlinked with a global supply chain for silicon and other things. So can the west make chips without TSMC? Yes. Very much so. Can the US make chips on their own, in a more limited way.
lupusreal 2y ago
Is that really an honest question? Because it looks like a setup for some trollish "hurr Intel doesn't count because they're stinky" nonsense. Yes, America makes chips. Always has and never stopped. Even of you don't like Intel, America's chip production is obviously sufficient for national security intents and purposes.
ta988 2y ago
Intel is struggling, TSMC found it extremely difficult to set operations there, that doesn't smell good. For >20nm chips sure, for bleeding edge that's yet to see.
- acchow 2y ago
  20nm? TSMC’s N4 plant in Arizona is set to be fully operational this year. There was a delay, and then their schedule was accelerated. https://www.emsnow.com/tsmcs-us-fab-reportedly-eyeing-for-early-mass-production/ https://www.emsnow.com/tsmcs-us-fab-reportedly-eyeing-for-ea... N3 is still a few years out (seems to be 2028)
  - ta988 2y ago
    Oh great so it finally moved. Glad to hear that.