Chinese Economy Watch

[helin]

China's growth strategy, characterized by heavy subsidization and deliberate financial losses to gain market dominance, raises significant concerns about its long-term sustainability. While this approach has allowed Chinese companies to capture substantial market share in industries such as steel, solar panels, and telecommunications, the reliance on aggressive pricing and government support can lead to economic inefficiencies. For instance, by selling products at or below cost to outcompete global rivals, Chinese firms often prioritize short-term market share over profitability, potentially creating unsustainable financial practices and overcapacity within these sectors.

Moreover, the strategy of leveraging economies of scale and dominating global supply chains, while effective in the short term, may contribute to long-term vulnerabilities. The extensive use of dumping practices, where products are sold in foreign markets at lower prices than in the domestic market, can undermine international competitors and lead to industry consolidation. However, this aggressive approach also risks provoking trade tensions and retaliatory measures from other countries, as seen in the escalating trade conflicts with the United States and the European Union. These tensions could disrupt global markets and diminish China's ability to sustain its growth.

Ultimately, the heavy reliance on subsidies and state intervention in strategic industries may lead to financial imbalances, such as high levels of corporate debt and economic inefficiencies. As China continues to push its influence through initiatives like the Belt and Road Initiative, the potential for geopolitical resistance grows, further challenging the long-term viability of its growth strategy. While this approach has brought China significant economic power, its sustainability is increasingly questioned, particularly as global powers seek to counterbalance China's influence in the world economy.

This Indian state is offering added subsidies for semiconductor manufacturing - CNBC TV18

Uttar Pradesh unveils Semiconductor Policy 2024, offering substantial subsidies and exemptions to attract investors for semiconductor units. Policy includes incentives for R&D centres, skills training, and electricity duty exemption, aiming to boost electronics manufacturing in the state.

www.cnbctv18.com

Without subsidies, India would never have been able to build a semiconductor industry.
The same goes for other countries

 

[helin]

China's growth strategy, characterized by heavy subsidization and deliberate financial losses to gain market dominance, raises significant concerns about its long-term sustainability. While this approach has allowed Chinese companies to capture substantial market share in industries such as steel, solar panels, and telecommunications, the reliance on aggressive pricing and government support can lead to economic inefficiencies. For instance, by selling products at or below cost to outcompete global rivals, Chinese firms often prioritize short-term market share over profitability, potentially creating unsustainable financial practices and overcapacity within these sectors.

Moreover, the strategy of leveraging economies of scale and dominating global supply chains, while effective in the short term, may contribute to long-term vulnerabilities. The extensive use of dumping practices, where products are sold in foreign markets at lower prices than in the domestic market, can undermine international competitors and lead to industry consolidation. However, this aggressive approach also risks provoking trade tensions and retaliatory measures from other countries, as seen in the escalating trade conflicts with the United States and the European Union. These tensions could disrupt global markets and diminish China's ability to sustain its growth.

Ultimately, the heavy reliance on subsidies and state intervention in strategic industries may lead to financial imbalances, such as high levels of corporate debt and economic inefficiencies. As China continues to push its influence through initiatives like the Belt and Road Initiative, the potential for geopolitical resistance grows, further challenging the long-term viability of its growth strategy. While this approach has brought China significant economic power, its sustainability is increasingly questioned, particularly as global powers seek to counterbalance China's influence in the world economy.

Companies like Foxconn and Micron would not invest in India without subsidies

 

[Azaad]

This Indian state is offering added subsidies for semiconductor manufacturing - CNBC TV18

Uttar Pradesh unveils Semiconductor Policy 2024, offering substantial subsidies and exemptions to attract investors for semiconductor units. Policy includes incentives for R&D centres, skills training, and electricity duty exemption, aiming to boost electronics manufacturing in the state.

www.cnbctv18.com

Without subsidies, India would never have been able to build a semiconductor industry.
The same goes for other countries

The difference is practically ALL your industries receive subsidies which wasn't the case with us until the PLI scheme was launched a couple of years ago that too for select industries where we want to cut down our dependence on China.

Like for example steel. Practically all Chinese steel is attracting anti dumping duties around the world.

As far as Chinese subsidies go , you need to convey your PoV to the EU who've launched investigations into CCP subsidies for the EV industry extending it to the wind turbine & solar panel mfg sector in China.

Who knows how many more such Chinese products will be targeted ?

 

[helin]

The difference is practically ALL your industries receive subsidies which wasn't the case with us until the PLI scheme was launched a couple of years ago that too for select industries where we want to cut down our dependence on China.

Like for example steel. Practically all Chinese steel is attracting anti dumping duties around the world.

As far as Chinese subsidies go , you need to convey your PoV to the EU who've launched investigations into CCP subsidies for the EV industry extending it to the wind turbine & solar panel mfg sector in China.

Who knows how many more such Chinese products will be targeted ?

What industries do not have subsidies in India？

United States Wins WTO Challenge to Indian Export Subsidies​

October 31, 2019

Washington, D.C.—A World Trade Organization (WTO) dispute panel agreed with the United States that India provides prohibited export subsidies to Indian exporters worth over $7 billion annually. According to the panel, India gives prohibited subsidies to producers of steel products, pharmaceuticals, chemicals, information technology products, textiles, and apparel, to the detriment of American workers and manufacturers.

“This is a resounding victory for the United States,” said U.S. Trade Representative Robert Lighthizer. “Under the leadership of President Trump, the United States is using every available tool, including WTO enforcement actions, to ensure American workers are able to compete on a level playing field.”

The Indian programs found in violation of WTO rules are: the Merchandise Exports from India Scheme (MEIS); Export Oriented Units Scheme and related sector specific schemes (EOU); Special Economic Zones (SEZ); Export Promotion Capital Goods Scheme (EPCG); and a duty free imports for exporters program (DFIS). The panel gave India six months to withdraw these prohibited subsidies.

According to the Indian Government, thousands of Indian companies are receiving subsidies totaling over $7 billion annually from these programs, and India has increased the size and scope of these programs. For example, India has rapidly expanded the MEIS to include more than 8,000 eligible products, nearly double the number of products covered since its introduction in 2015. Exports under the SEZ have increased over 6,000 percent from 2000 to 2017 and in 2016 accounted for over $82 billion in exports, or 30 percent of India’s export volume. Exports from the EOU increased by over 160 percent from 2000 to 2016.

Background

Export subsidies provide an unfair competitive advantage to recipients, and WTO rules expressly prohibit them. A limited exception to this rule is for specified developing countries that may continue to provide export subsidies temporarily until they reach a defined economic benchmark. India was initially within this group, but it surpassed the benchmark in 2015. India’s exemption has expired, but India has not withdrawn its export subsidies.

Today’s panel report rejects India’s assertion that it is entitled to additional time to provide export subsidies even after hitting the defined economic benchmark. The panel report concludes that each program is an export subsidy inconsistent with India’s WTO obligations.

The withdrawal of these prohibited subsidies will result in American workers and manufacturers competing on a fairer basis with their Indian competitors.

###

 

[srev2004]

Companies like Foxconn and Micron would not invest in India without subsidies

Yes but subsidies make sense if you have a fiscal balance not what China is doing with debt based growth

 

[helin]

Yes but subsidies make sense if you have a fiscal balance not what China is doing with debt based growth

Debt is not a monster, as long as it is affordable

 

[E-195]

What a beautiful fighter

dodged question, trying to boast.

You simply do not understand globalization

 

[E-195]

More industrilized population, more high quality population. More woman participantion in work.

View attachment 8082

View attachment 8081

when people speak by their blow holes this happens

Which Countries Have the Most and Least Women in the Workforce?

More women in the workforce can indicate a shift towards women having more economic opportunities and facing fewer barriers to working outside the home.

www.visualcapitalist.com

Most industrilized country according to the always respectful Rockdog

Madagascar, Ethipia or tanzania

 

[srev2004]

Debt is not a monster, as long as it is affordable

Debt only makes sense if your fiscal deficit has long term growth. You don’t have that with a declining population. The concept of debt in a basic lamen term is borrowing against future earnings. If future earnings from a fiscal perspective will reduce and more of it will go towards social security; then debt based growth model won’t work.

You need to switch to investment based growth or find strategies to increase your population, or terminate social security. You would have to reintroduce multi-generational households and expect deflation of real estate sector and eating out. Fundamentally what worked for China for last 40 years won’t work going forward.

This will boost family based social security, weaken state hold over families and lead back to higher TFR rates. In other words, the things that you look down India for are actually strengths for China in this case.

 

[E-195]

It will only work in short term but it will have long lasting effects in that it would only spur Chinese to develop its own ASLM technology base and create a formidable competitor. China do have the means to replicate ASML and its vendor on a massive scale. The only country that can do that.

I differ, any industry is very expensive, no sales means you can control that industry, an old capitalist trick does not matter if you have the technology, so work division reduces investments risks, it means China will not control the chip market if the chain of production is not shared, tariffs are the result of the Chinese attempts to by pass and destroy the industries of other countries, joint ventures mean thet need to respect the other countries industries.

Can they compete? no, they have gotten industrialized as a desire by the Bankers gangsters to weaken Russia, the USA and Europe, but they will not rule, the world government will stop China and only let it grow where they can keep other nations under their leash, when the Chinese hound wants to lead it will be crushed, no nation will scape the world government.

 

[Blademaster]

I differ, any industry is very expensive, no sales means you can control that industry, an old capitalist trick does not matter if you have the technology, so work division reduces investments risks, it means China will not control the chip market if the chain of production is not shared, tariffs are the result of the Chinese attempts to by pass and destroy the industries of other countries, joint ventures mean thet need to respect the other countries industries.

Can they compete? no, they have gotten industrialized as a desire by the Bankers gangsters to weaken Russia, the USA and Europe, but they will not rule, the world government will stop China and only let it grow where they can keep other nations under their leash, when the Chinese hound wants to lead it will be crushed, no nation will scape the world government.

I did not say that China will control the chip market only that the Dutch will essentially create the atmosphere and ingredients to produce a true competitor, which may be a China company to ASML and that competitor cannot be constrained by US or EU directives or sanctions.

 

[rockdog]

Electricity production in China has rapid growth due to manufacture, EV, AI booming. Now it's twice than USA.

Debt is not a monster, as long as it is affordable

If you are using traditional way to deal with debt like Earn-return-loan loop, you will never get out of debt.

So it's not only a matter of affordable or not, but the government need to expand manfacture and export, it will leverage the debt, this is what the CCP doing i think.

Actually, even central bank overprint limited RMB to buy resources from Russia, they like to accept RMB, since they know by RMB to would buy all industry products from China.

Not all the nations would over print helicopter money without massive inflation, only USA and China. No one accepts Zimbabwe currency, No one accepts Argentina currency since natural resource and agriculture output is always not stable on price wise. But USA owns financial and military hegemony, China owns manufactures.


It gives more spaces for debt expanding.

China's export performance has been a subject of considerable interest and analysis, particularly given its impressive growth trajectory over recent years. Between 2019 and 2023, the value of China's exports to the world rose by 35.2 percent, reaching a substantial US$3.38 trillion.

This is why China in recent five years, twice the electricy output than USA, one is EV and new engery booming, one side is the manufacture & export is still expanding!

 

[Azaad]

What industries do not have subsidies in India？

United States Wins WTO Challenge to Indian Export Subsidies​

October 31, 2019

Washington, D.C.—A World Trade Organization (WTO) dispute panel agreed with the United States that India provides prohibited export subsidies to Indian exporters worth over $7 billion annually. According to the panel, India gives prohibited subsidies to producers of steel products, pharmaceuticals, chemicals, information technology products, textiles, and apparel, to the detriment of American workers and manufacturers.

“This is a resounding victory for the United States,” said U.S. Trade Representative Robert Lighthizer. “Under the leadership of President Trump, the United States is using every available tool, including WTO enforcement actions, to ensure American workers are able to compete on a level playing field.”

The Indian programs found in violation of WTO rules are: the Merchandise Exports from India Scheme (MEIS); Export Oriented Units Scheme and related sector specific schemes (EOU); Special Economic Zones (SEZ); Export Promotion Capital Goods Scheme (EPCG); and a duty free imports for exporters program (DFIS). The panel gave India six months to withdraw these prohibited subsidies.

According to the Indian Government, thousands of Indian companies are receiving subsidies totaling over $7 billion annually from these programs, and India has increased the size and scope of these programs. For example, India has rapidly expanded the MEIS to include more than 8,000 eligible products, nearly double the number of products covered since its introduction in 2015. Exports under the SEZ have increased over 6,000 percent from 2000 to 2017 and in 2016 accounted for over $82 billion in exports, or 30 percent of India’s export volume. Exports from the EOU increased by over 160 percent from 2000 to 2016.

Background

Export subsidies provide an unfair competitive advantage to recipients, and WTO rules expressly prohibit them. A limited exception to this rule is for specified developing countries that may continue to provide export subsidies temporarily until they reach a defined economic benchmark. India was initially within this group, but it surpassed the benchmark in 2015. India’s exemption has expired, but India has not withdrawn its export subsidies.

Today’s panel report rejects India’s assertion that it is entitled to additional time to provide export subsidies even after hitting the defined economic benchmark. The panel report concludes that each program is an export subsidy inconsistent with India’s WTO obligations.

The withdrawal of these prohibited subsidies will result in American workers and manufacturers competing on a fairer basis with their Indian competitors.

###

Thereafter, in June last year, both sides decided to close half-a-dozen outstanding disputes at the WTO including the retaliatory tariffs India imposed on imports of some farm products from the US. The announcement was made after Modi’s meeting with Biden in Washington.
The six disputes included India’s appeal against the US's imposition of tariffs on imports of steel and aluminium products from India; the US appeal against India’s retaliatory tariffs; India’s renewable energy subsidies for solar cells and modules under Jawaharlal Nehru National Solar Mission; India’s appeal over similar subsidies for solar cells and solar modules by eight US state governments; the US appeal against India’s export subsidy programmes; India's imposition of countervailing duties on imports of certain hot-rolled carbon steel flat products from the US.

https://www.business-standard.com/world-news/india-us-successfully-resolve-all-seven-pending-wto-disputes-bilaterally-124032300202_1.html

 

[rockdog]

Xpeng released Tesla Modle 3 level EV with $17000, got 30000 orders in one day.


View: https://youtu.be/Mg0LCu56h1M?si=QA9I2z37o2PaQG1b


View: https://youtu.be/RaqsuuWMmCE?si=RIzFEnbmLlh_T09Y

 

[srev2004]

Electricity production in China has rapid growth due to manufacture, EV, AI booming. Now it's twice than USA.


If you are using traditional way to deal with debt like Earn-return-loan loop, you will never get out of debt.

So it's not only a matter of affordable or not, but the government need to expand manfacture and export, it will leverage the debt, this is what the CCP doing i think.

Actually, even central bank overprint limited RMB to buy resources from Russia, they like to accept RMB, since they know by RMB to would buy all industry products from China.

Not all the nations would over print helicopter money without massive inflation, only USA and China. No one accepts Zimbabwe currency, No one accepts Argentina currency since natural resource and agriculture output is always not stable on price wise. But USA owns financial and military hegemony, China owns manufactures.


It gives more spaces for debt expanding.




This is why China in recent five years, twice the electricy output than USA, one is EV and new engery booming, one side is the manufacture & export is still expanding!
View attachment 8112

China has 4x us population, 2x energy output means you use half the us energy per capita

 

[srev2004]

US is 13x India per capita

 

[srev2004]

As I said, these are all vanity metrics. What matters for China is fiscal spend distribution between growth and social security.

 

[srev2004]

Chinese fiscal revenue is 3.3 trillion and expenditure is 4 trillion, which means 0.6 trillion is debt based expenditure

 

[srev2004]

India’s entire fiscal budget is $575 billion, China’s deficit is $600 billion per year. Gives you a perspective on the scale of your debt accumulation

 

[srev2004]

India’s entire fiscal budget is $575 billion, China’s debt is $600 billion. Gives you a perspective on the scale of your debt accumulation