There's not too much fake origin stuff from Vietnam to US, which is the largest SEA country exporting to US.
"However, new research from Harvard Business School and Duke University paints a more nuanced picture — rerouting appears to be lower than is imagined.
While trade rerouting through Vietnam does occur, its scale appears far smaller than previously thought. The study found that in 2021, about 16.1 per cent of Vietnamese exports to the US — roughly US$15.5 billion — could be classified as potential rerouting when analysed at the product level. But when the researchers examined individual firms — tracking specific products flowing from China through Vietnam to the US — the figure fell to just 1.8 per cent, or US$1.7 billion."
Of the items that are rerouted, does Vietnam (or other similar countries) tend to move up the value chain over time? Or do the supply chains just stay as they are.
I suspect, possibly hopefully, that over time the "rerouting" countries would evolve from simple assembly/repackaging to sourcing more granular pieces of the manufacturing process from within their own borders. How fast that might happen is another question.
If anyone has any sources on this I would love to read more about it, I'm just not sure how to find them.
2.) Some of the data that it's based on is up to 2023. And some are up to 2020
3.) There has been massive movement of manufacturing out of China between 2020 and 2024. I won't provide the references here, as there are too many to mention, from Japanese/Taiwanese/South Korean/European/American companies. They are easily chatgpted/googled. Also the reason why Shenzhen and Guangzhou has suffered deeper drop of real estate price and employment.
4.) In 2024, Mexico was the biggest exporter to US. United States was the biggest exporter to Europe. US was the largest export destination of Japan.
5.) Trump's 60%-100% tariff on China will accelerate the exodus of manufacturing
Again, I really don't feel qualified to weigh in on most of these matters, though I will say that I generally do prefer direct citations if you'd like me to take the epistemic credibility of a claim more seriously than any other thing someone on the internet said (in other words, saying "go look it up" provides no more additional credibility than simply making the statement, and is thus kind of pointless, and in fact you take a not insignificant epistemic credibility hit for my purposes by suggesting that asking an LLM for factual information should be taken as a reliable source)
That said, it's interesting to see how the supply shocks of a global pandemic can shift these kinds of relationships. It doesn't surprise me that Mexico, being a huge source of food for the US, is the largest exporter to it. What I do wonder is how much exports pertain to manufacturing relationships. Like in the case of Mexico -> US, I think we wouldn't count e.g. stuff we buy for the produce section to be manufactured goods, but that would still count toward import/export numbers. Does this apply to other things too? Do things like IP count?
- Chinese imports into the United States are down 19.78% from April of 2018 — when Trump first started imposing tariffs — to today, or $31.88 billion.
- Cell phones: Big winner is India. China has gone from a market share of 63.59% in 2018 to a still strong 42.14%. That’s a decline of 33.73%.
- Computers: Big winners are Taiwan, Vietnam. China has gone from a market share from 53.45% in the first four months of 2018 to 28.11%, a decline of 47.40%.
- Furniture: Big winner is Vietnam. China, meanwhile, accounted for 23.55% this year, down from 48.54% in 2018, a decline of 51.49% compared to a gain of 88.67% for Vietnam.
- TVs and monitors: Big winner is Vietnam. Mexico overtook China as the import leader in this category just before the pandemic and has remained on top. It gained market share from China, which fell from 53.68% in 2018, when it was No. 1, to 33.64%, a 37.32% decline.
- Digital storage devices: Big winners are Korea, Vietnam. China accounted for 39.50% of those imports in 2018, more than double that of any other nation. In 2024, its percentage is 4.23% and it ranks No. 9.
- Digital cameras: Yep, Vietnam again. China, meanwhile, has seen its share go from a majority, at 50.09%, to 17.57%, a decline of 64.92%.
> TVs and monitors: Big winner is Vietnam. Mexico overtook China as the import leader
This doesn't make sense to me, do they do some high level assembly of components? I think China took over global market of TV panels manufacturing for example:
With this transaction, Chinese manufacturers’ market share of the LCD panels used in TVs will increase from 66% to 72%, with nearly 100% share in ultra-large 90 – 115 inch screens.
The market share of Chinese OLED panel manufacturers is forecasted to increase from 47.9% this year to 50.2% next year, surpassing the OLED shipment share of Korean companies.
> a competitor (China) has caught up in most of industries
stop spreading misinformation. go look at largest companies by market cap in the world https://companiesmarketcap.com/ and you'll see US domination while China has a few handful of companies, mostly banks.
> government and elites realized that we’re screwed
That's more like China. That's why 15k rich chinese are fleeing the country in 2024 https://www.forbes.com/sites/miltonezrati/2024/07/03/high-ne..., the most of any country in the world. US isn't the one where the stock market and real estate has collapsed.
All those things you said are objectively true. But it’s literally US government who is up in the arms right now screaming left and right how “we have to win against China”. Not taking China as a serious competitor is just weird nowadays. Take most of top industries, and you can find its equivalent in China serving the same amount of people.
China does have a current advantage on lithium battery and rare earth materials - dumb technologies that US and allies can replicate fairly quickly, less than a year. EUV and 3nm and below on the other hand, will take decades, since it involves a number of different and deep technologies controlled by dozens of companies. China has thrown $150B on it since 2014, and has only come up with low yield/unprofitable 7nm via existing DUV machines.
> 80% GDP
China's demographics will more than HALF to 500M by 2100, if not earlier, while US grows to close to 400M by then. Someone actually theorizes that China's population is already only 800M right now https://www.youtube.com/watch?v=fR5F_8dSjOw
Also, a lot of that GDP is debatable in 2024, when real estate prices have dropped by more than 50% in tier 2 and below cities, and deflation has raged on.
> when real estate prices have dropped by more than 50% in tier 2 and below cities, and deflation has raged on.
Can other economies copy that part? I know a bunch of people who'd like to be able to afford more houses & more groceries at the same time. I'd like that, I can't realistically afford a house in the city I live in without a 50% price drop.
I'm sure China has a lot of problems, but key goods getting cheaper is not one of them. What I'm guessing you meant to say is that retirees were led to put too much of their savings into the housing market and are discovering there is a glut. Which is tragic for them. But prices dropping is a good thing; the unachievable ideal is a utopia where everything is free, ie, 100% deflation.
China's real estate prices having dropped 50% or more has been accompanied by/caused by wages being slashed 50% or more, and increasing unemployment rate, such as 30%+ for youth.
Here are some good posts on why nobody wants deflation:
So some might suggest that the problem is wages being slashed by >50%? Falling real wages are actually a problem. And, AFAIK by definition, are not influenced by inflation or deflation. But if wages had fallen by <40% and prices by >50% then the overall situation was probably improving. A bit chaotic to be comfortable, but not fundamentally worse.
And there is an unemployment problem too, obviously.
'CCP is a secret and authoritarian regime that wields immense power'
vs 'Some random reporter with English firstname and Chinese lastname know what Xi said before he go to bed'
Have you ever wondered if there's a tiny possibility that the media and the reporter *might* be lying?
It's commonly referred to as a deflationary spiral because the falling prices lead to people (perhaps counterintuitively) holding off from large purchases, anticipating a continued drop in prices. Sort of a "buy the bottom" mentality.
The lack of spending then further contributes to falling prices, job cuts, businesses closing, etc. It's really not a situation any economy _wants_.
That is obviously wrong to the point where I am confused why someone always makes the claim. I'm looking forward to running in to someone who can actually follow up with some sort of defence of the position. Extraordinary claims, extraordinary evidence style.
Consider the computer industry. Prices have been falling pretty much across my entire life. Supply-demand suggests that people will keep buying new computers as the price drops and that is exactly what is happening. Demand for compute has never been higher. There is no waiting for improvements, if anything there is a mad rush to buy hardware that everyone knows is about to be obsoleted. It isn't even an irrational rush, the people buying that obsolete hardware often make good money (eg, bitcoin miners in the heyday).
Basic supply demand says as price drops demand increases. Basic life experience says as prices drop I can afford more and better stuff. Observation of real industries suggests - as we would intuit - that industries with regular price drops are actually healthy and great to be in for consumers in the small and the large. Theory suggests that everyone ignores nominal price fluctuations and focuses on real changes so systemic deflation is irrelevant. None of this supports the idea that deflation is bad.
Pretty sure the anti-deflation crowd are just wrong. They have no evidence or argument [0] as far as I can tell, and all the theory is stacked against them. China surely has problems. Deflation is not a problem. It is just a metric.
[0] EDIT Well I suppose they do have an argument, but it involves people randomly going crazy and choosing to live in poverty and discomfort because it gets easier to buy goods. Which is not an argument I really take seriously.
Deflation is a problem, but not for the reason mentioned there. The reason deflation is an issue is because it makes holding cash into an investment strategy. If the price of goods is dropping, the value of money is rising, so the more cash I hold the richer I get. This obviously dissuades people with cash from investing their cash into actual productive work, which means fewer jobs. There was a small deflationary bump in American history around the 1930s that helps to illustrate what can happen in a deflationary spiral.
Like interest on a bank account? Holding cash is already an investment strategy. Bonds are a thing. People have options to hold cash and not lose purchasing power. One of the traditional ways people tackle inflation is they demand interest from the banks sufficient to cover it plus a little more to account for time value of money.
It is rather unlikely that giving people an option that they already have is going to cause a problem. One major benefit of money is that people can hoard it and there is no cost in the real economy because all the resources are still there and prices can just adjust to the amount of cash in circulation.
> here was a small deflationary bump in American history around the 1930s that helps to illustrate what can happen in a deflationary spiral.
The US came out of the 1930s with an economy that was capable of overcoming almost literally the entire world. Again, the evidence that deflation was some sort of major problem is questionable, it seems to have been associated with the creation of one of the most dynamic economies in the history of history.
And the idea that we have this one clear lesson from one instance back in the 30s is just weird and unbelievable. That isn't how history or complex systems work.
I have never understood the concept of the deflationary spiral: no matter how much people want to save their cash for later, there are simply things they can't do without.
Food, energy, transportation, education, etc.
How long are you going to delay getting a new car simply because cars are getting cheaper and better? Once you probe the theory beyond the surface, it collapses. Yes, a deflationary economy will see less cash velocity than a ZIRP economy with cheap cash sloshing around. But, at the end of the day, humans MUST spend resources today to live to see their savings worth more.
You're missing the debt equation. We live in debt based economy. True across the board deflation (not just some things get cheaper cause of tech etc) means debt is harder and harder to service as wages and earnings fall. As the asset backing the debt goes underwater the debt holders have no choice but to walk away. All banks stop lending and ultimately the entire economy grinds to a halt. That's the main cause of the spiral.
One man's debt is another mans income.
The reason we narrowly avoided full blown deflation in 2008 is because they bailed out the banks. If they didn't we would have had 1929 style depression these last 15 years.
Yeah people only spending money when they should be spending it is bad for the economy. Misallocation because of inflation is great. Good thing is that this system is close to collapse.
I think peak propaganda and manipulation was convincing people that inflation is good for the economy and therefore for them. Imagine prices constantly dropping and your money buys more than ever, uhm, like the deflation happening in tech. That would be very bad for the economy. The irony is that the best performing sector has been the one deflating the most.
Northvolt isnt lacking funding (pedantically they are, else they wouldnt be bankrupt) or clients, but know-how for scaling putting aside some conspiracy theories about Chinese equipments. Turns out scaling isnt easy.
vanadium redox flow isnt very big yet even for Energy Storage System
Side note: The tendency US and Westernin general to depend on Wunderwaffe tech (Vanadium Redox! Solid State Battery!) is quite amusing.
> China’s startup scene is dead as investors pull out
Turns out Emperor Pooh dislike get-rich-quick startup mentality and yet another useless apps. He wouldnt mind hard tech bro like Ren Zhengfei or Wang Chuanfu though.
P.S. Watch the robotic space, things might get interesting in a year or two.
So why aren't US and allies demonstrably replicating EVs (and other kinds of green technology) quickly? Tesla is still pretty much the only serious player. Why are CEOs of major western carmakers painting a very different picture than what you describe here? Where are the serious EU/US battery makers that are globally competitive? It looks to me like the EU has chosen the worst of all options: put up tarriff barriers while also not having serious domestic EV makers, and also not stimulating domestic EV development.
Yeah I mean, with the sad state of the Dutch electric grid, the poor coverage of chargers, and the disappearing consumer subsidies, I wouldn't want either. So why aren't governments also building the infrastructure they need to help stimulate demand for EVs? Not taking global climate disaster serious enough?
Building EVs and supporting infrastructure is a lot more complicated than just having a bunch of blueprints.
Because the agenda is not transitioning the current fleet to EV, it is making private transport a privilege of the top percent in the process.
Personally, I am not sure yet whether I like this or not. I can see good arguments for and against.
I wish it would be an honest open policy instead of the current vice grip of on the one hand passing aggressive phase out timelines of ICE through regulation, and on the other doing nothing to prepare a grid for mass EV adoption.
I can see why it wouldn't pass a democratic vote, but I also think chances of this passing under the covers are fairly slim as any time one of their roadmapped phases comes near they usually have to postpone them to appease the public.
While the share of services in the US GDP is more than 3/4. What will you do with all these expensive NY lawyers when push comes to shove? Sue China's drones?
1.) EU will soon have rules to prevent Chinese AI from proliferating, since China is ramping up on its support of Russia invasion of Europe - China Is Cutting Off Drone Supplies Critical to Ukraine War Effort [1]. China is reportedly making drones for Russia instead, according to multiple intelligence officials.
2.) Chinese models have to censor a long list of words that threatens the government, which makes them super dumb. List of stupid words example: sprinkle pepper, accelerationism, my emperor, lifelong control, etc. and the list of censored words grow(!!) as Chinese citizens try different combination of words to escape censorship.
3.) not even sure what this sentence means and how it makes Chinese models better
> China has been building strong relationships with a number of countries
Number of irrelevant countries. US's allies are Europe, Japan, South Korea, Taiwan, Canada, Mexico, Australia, etc. 80% of the world's wealth. and 95% of the world's top technologies.
> guess where these countries are buying their drones from
Soon, not China. China Is Cutting Off Drone Supplies Critical to Ukraine War Effort [1]. China is reportedly making drones for Russia instead, according to multiple intelligence officials.
According to the World Economic Forum[1], the USA plus the whole EU make up 29% of the world's GDP-PPP, while the BRICS countries come up at 37.3%.
You also included Japan, Australia, South Korea, Canada and Taiwan, but I find it hard to believe they would make up a very significant part of the difference.
On the former point, all the wealthy countries are in team USA, although team USA seems intent on shooting itself on the foot multiple times.
Team China is not as tight as team USA, but has a number of strings it can pull with its members. These are countries that, while not prosperous themselves, provide the raw material for most of the West's industries. A lot of critical resources are often only found in these countries. Not to mention, they have often aligned against USA gang in most cases, at the UN, while also aligning with China. Look at how many countries have signed public declarations stating that the Uighur camps in China don't exist/don't repress Uighurs.
On the second point, the article only states that China is cutting Ukrainian drone supplies to supply Russia instead - that's exactly the danger the West should be worried about. China also supplies an increasing number of armaments to partner countries such as Saudi Arabia, Iran, Nigeria and Egypt. Needless to say, China is currently the world's largest exporter of military UAVs.
China has 900M people making less than $400/month, and 600M people making less than $100/month. relative GDP is a joke, go to China to see what most of them are eating (hint: it's unsafe food filled with chemicals, or its mostly carbs) and where these people are living (hint: it's shoddy constructed condos or run down farm houses)
Not sure why you have something against the flyover states. I'm sure there's more shoddily constructed condos in Florida/California/New York per capita than there is in the Midwest. Same goes for cheap high calorie food.
Of course, the same can probably be said about the large population centers in China too. More people concentrated in one area tends to mean more poverty in that area and all the things that come with it.
The parallel is that there are rich and poor? It is unscrupulous to argue in imprecise, binary terms while ignoring the difference in scale. People in flyover states are not making only $400/mo or even occupying that same societal equivalent of China in America.
Why should Europe allowed China to attack and destroy its car industry, when China is also helping Russia destroy Europe militarily?
Good thing Europe woke up earlier this year. impact of the EU’s tariffs on Chinese EV manufacturers. In November, Chinese automakers captured just 7.4% of Europe’s EV market, a noticeable drop from 8.2% in October and their lowest share since March [1].
As for US, the 100% tariff has safely protected America from Chinese EVs thus far.
“Protected America from Chinese EVs” - aka, ensuring the long term irrelevance and stagnation of American car manufacturers. They will keep their sales temporarily while the rest of the world leaves them behind
What causes issues to Europe's car industry is not Chinese cheap EVs in Europe. There are not even many Chinese EVs driving around here, those tariffs will have very little impact.
What damaged the EU cae makers was that they had a very good market in China, and Chinese EV makers could step up and make cars that were more desirable/affordable for their domestic market. The loss of profits in China is what hurt everyone, because that country alone is a very large market.
> China is also helping Russia destroy Europe militarily
This is a disingenuous framing based on the mere fact that China continues to do business with Russia. China also continues to do business with Europe and Ukraine, so one can just as easily argue that China is helping Europe destroy Russia. Have you seen the number of Chinese-made commercial-grade drones used by Ukraine?
China is "destroying European carmakers" as much as your local supermarket A "destroying" supermarket B. It's called competition. As someone else said, Chinese subsidies have already declined, way way before the EU tarriffs went into effect, and the EU and US can also decide to subsidize their carmakers.
> Have you seen the number of Chinese-made commercial-grade drones used by Ukraine?
China Is Cutting Off Drone Supplies Critical to Ukraine War Effort [1]. China is reportedly making drones for Russia instead, according to multiple intelligence officials.
Today you sell a country a computer, engineering software, books, chips and industrial machines, tomorrow you have missiles pointed at you designed using that computer and manufactured using that machines.
I think you are mistaken about the purpose of DOGE. The one thing they've actually tried is to get the debt ceiling eliminated so the government can run unlimited borrowing. Which would be used to fund tax cuts for the people running DOGE and anyone lucky enough to also be in those tax brackets.
It's funny that the waterboy is always a very important member of the team anytime water needs to be carried. But when they win the championship, he is not allowed to touch the trophy.
Got a citation for that claim? Because from what I see it's still enormously higher than it was 4 years ago: https://tradingeconomics.com/argentina/inflation-cpi (166% annual rate in Nov 2024, compare with 35.8% annual rate in Nov 2020).
Those are annual (over-the-prior-year) numbers, not monthly ones. When there is a rapid swing like this it makes more sense to look at monthly inflation (a much better approximation of the rate right now), which is at the lowest it's been in four years.
Time will tell if the economic shock actually works in Argentina and all the suffering it has caused and is causing was not for nothing. It didn't really work for Chile.
Argentina NEEDED a shock. The US can and should take a more delicate approach. Though iirc Elon has said that Americans will face hardship and they need to be OK with that. Nice sentiment from the world's richest man.
Then Intel is going to have to wait for a very long time. At best, China is currently in a scenario similar to Japan's lost decade of 30 years or US's Great Depression. At worst, China's current deflation + massive debt seems eerily similar to Weimar Germany's early internal devaluation. China is pretty fucked.
US fully recovered from Great Depression in 1939, 2 years before entering ww2. Weimar Germany started in 1918 and ended in 1933 at the beginning of nazi Germany, 15 years later.
You can't start a war when you are truly broke, much like China is today. And China is aging super fast, unlike Germany or US during the 30s.
Being in spiraling deflation while the rest of the world suffers from inflation is a big sign of being broke.
Having debt to GDP ratio of 310% and local governments being unable to pay out salaries for many months is a big sign of being broke. (google or chatgpt the salary news, they are everywhere)
Consumer spending dropping 20% y/y in November in Beijing and Shanghai is a sign of being broke.
52,000 EV-related companies shut down in China in 2023 and an increase of 90% on the year before, where most EV companies were the targets of government subsidies, is a sign of being broke.
30% drop in revenues from land sales in 2024, which the local government derive most of its revenue on, is a sign of being broke.
China is not self sufficient; it imports 80% of consumed soybeans and other food products, and 90% of semiconductor equipments. Nor is it even remotely at the same level as Japan when Japan entered the lost decades. 600M Chinese citizens earned less than $100/month as of 2020. Recently, a scholar reported 900M Chinese citizens earned less than $400/month.
> Being in spiraling deflation while the rest of the world suffers from inflation is a big sign of being broke.
How would you handle the eloquent counterargument that spiraling deflation is not a sign of being broke? Deflation doesn't, in and of itself, signal anything except that the real value of a currency is going up.
China is one of the worlds largest creditors [0]. They may have a lot of organisational problems - I'd go as far as saying they are guaranteed to given they are quite authoritarian. But they aren't broke.
None of those metrics signal problems in and of themselves, and when put together ... they still don't. The consumer spending drop is the closest to something that might be a problem but it needs some supporting data to make a case.
Deflation by itself, sure. Deflation when coupled with huge and increasing debt to service, then you have a crippling problem. That means your ability to pay off your debt gets harder and harder as time goes on, and most of your income goes to service debt principal and interest, and not on actual income growth. China plans a record $411 billion special treatment treasury bond next year, for example, but most if not all of that is just helping local governments pay off debts.
China being the largest creditor doesn't mean much when a lot of their debt is issued to belt and road countries that can never be paid back, and will be written off in the future. It does have a large US debt holdings, but that has shrank from 1.27T (2013) to 772B (2024), and a large part of that being used for cross border transactions.
> Deflation when coupled with huge and increasing debt to service, then you have a crippling problem.
Individuals have a problem. Corporations have a problem. China may or may not have a problem. It depends on how reasonable their bankruptcy laws are. Cleaning out the system of people who aren't using capital effectively is a healthy thing to do.
And I have to say, this idea that we should focus on China's debts and dismiss their credits is suspect. I mean sure, if we ignore all the assets and income streams then they do have a problem. But that isn't reasonable. You can't ignore the strengths to make an argument they are weak.
Let me put it in another way; it's similar to the US banks during 2008, when they appeared to be healthy, holding lots of subprime loans on their books.
If we are talking about China's credit, China has a lot of subprime loans to belt and road countries that have very little income, and lot of subprime loans to their citizens, which recently a scholar reported that 900M of them make less than $400/month.
Possibly. But if the US system was a wealth-producing engine like China's has been in recent history 2008 wouldn't have been all that big a deal. They'd have bounced back in a year or two. Instead in 2008 the US made decisive moves to preserve a system that isn't generating much wealth for the US, and over the course of around 20 years they've arguably managed to give up their position as #1 global economy and are packing stadiums full of people chanting "We love Trump. We love Trump". Looks to me like it is going down in history as a major turning point for the worse.
If China has to take decisive steps to preserve whatever craziness is going on in the mainland, they're going to be preserving a system that has at least 10x-ed their wealth over the last 30 years while producing vast amounts of real capital that has catapulted their living standards up to a much more reasonable standard.
I wouldn't necessarily gamble on China because the system doing well looks unstable and could veer to disaster at any moment the central bureaucracy does something stupid. But we don't have strong evidence of a problem yet. We've got strong evidence they aren't acting like the US, but the US hasn't been setting an inspiring example in decades. As with a lot of economic problems, most of the damage from 2007 was doubling down on failing strategy rather than taking the hint that something needed to change.
And I'm not seeing evidence here that China is broke. They might muck this up, always an option, but they have all the tools they need to succeed in principle.
Tiresome take that's been repeated time and time again. China has problems like any other country larger than Luxemburg. But the conclusion that "china is fucked" sounds more like a wish than anything else to my ears. The Chinese economy is growing ~5% per year. It's got one of the worlds most well educated workforces. It's manufacturing everything from basics to high tech and very little indicates that's about to change anytime soon.
The chip technology sanctions might slow development in that area in China, but I wouldn't count on it.
It's pretty tiring responding to folks who just parrot Chinese government's official 5% numbers and never bothered look into the actual details. Like its well educated workforces being laid off at age 35, and 80% of recent graduates are unemployed or driving didi or delivering food. Or China's low end manufacturing shutting down or moving to Southeast Asia, and high end manufacturing being tariffed/sanctioned.
"However, new research from Harvard Business School and Duke University paints a more nuanced picture — rerouting appears to be lower than is imagined.
While trade rerouting through Vietnam does occur, its scale appears far smaller than previously thought. The study found that in 2021, about 16.1 per cent of Vietnamese exports to the US — roughly US$15.5 billion — could be classified as potential rerouting when analysed at the product level. But when the researchers examined individual firms — tracking specific products flowing from China through Vietnam to the US — the figure fell to just 1.8 per cent, or US$1.7 billion."
https://fulcrum.sg/vietnam-china-and-rerouting-when-percepti...