“China’s surplus in manufacturing has risen as much relative to world GDP in the last few years as it did during the first China shock following the country’s accession to the WTO“
A big driver of this is the export of Chinese manufacturing into Vietnam and other countries for final export.
“the reality is more complex: put plainly, it is impossible for a global economy characterized by a large U.S. deficit on one side and a large Chinese surplus on the other to truly fragment.“
Corporate tax avoidance also boosts globalization – “American multinationals now often produce abroad to book large profits in offshore tax havens“.
Has gone negative for the first time in many decades.
Some have pointed out that this is due to retained earnings repatriation out of China and not true investment, but the concern still remains longer term.
This chart is paired nicely with a very interesting article from the New Yorker – “China’s Age of Malaise”.
Some fantastic anecdotes “a leak from a Chinese social-media site last year revealed that it blocks no fewer than five hundred and sixty-four nicknames for him, including Caesar, the Last Emperor, and twenty-one variations of Winnie-the-Pooh.”
The world of foreign exchange reserves is full of false narratives and complex data.
Here, Brad Setser, uses international banking sleuthing to show that China has not switched its reserves away from dollars.
“Bottom line: the only interesting evolution in China’s reserves in the past six years has been the shift into Agencies. That has resulted in a small reduction in China’s Treasury holdings – but it also shows that it is a mistake to equate a reduction in China’s Treasury holdings with a reduction in the share of China’s reserves held in U.S. bonds or the U.S. dollar.“
A very handy tool that tracks strikes in China – both statistics and as a map.
Latest monthly numbers have seen a spike.
“Worker strikes have reached a new height after the pandemic,” Aidan Chau, a researcher at CLB, told Nikkei Asia. “Many protests are related to slowing demand in international trade.” (Nikkei Asia).
Kotkin is a scholar of Russia and the Soviet Union. Most famous for his three-part (only two are published so far) biography of Stalin.
In this interview, he turns his attention to China.
There are a lot of interesting points made here.
“There are two subjects at Party School that are absolutely dominant in the Chinese case. One is the supposed decline of the United States … But the other big subject — in fact, it’s an even bigger subject for them — is not having a Soviet collapse in China“
Interesting to read this together with Dalio’s latest on the US v. China.
Conversation between Tyler Cowen and Yasheng Huang on China.
Wide ranging and in-depth, especially understanding the cultural, historic and sociological drivers that help understand China and turbulence ahead.
“One reason is the charisma power of individual leaders, Mao and Xiaoping … they could do whatever they wanted while being able to contain the spillover effects of their mistakes. The big uncertain issue now is whether Xi Jinping has that kind of charisma to contain future spillover effects of succession failure.”
“This is a remarkable statistic: Since 1976, there have been six leaders of the CCP. Of these six leaders, five of them were managed either by Mao or by Deng Xiaoping. Essentially, the vast majority of the successions were handled by these two giants who had oversized charisma, oversized prestige, and unshakeable political capital”.
Also a super interesting discussion on “why Chinese and Chinese Americans have done less well becoming top CEOs of American companies compared to Indians and Indian Americans”.
