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Predictions of US vs China hegemony long term

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Predictions of US vs China hegemony long term

Unread postby bochen777 » Tue 03 Sep 2019, 13:30:19

Ever since WWII the US Petrodollar hegemony has reigned supreme. In 2014 China's GDP PPP surpassed the USA for the very first time, something that has never happened before. Back during the height of the Japanese economy of the late 1980's Japan peaked at around 40% to 60% of US GDP and was more or less compelled into signing the Plaza Accord which many agree lead to its 4 decades of lost growth etc. It doesn't appear Xi/China will follow in Japan's footsteps in terms of acquiescing to a trade deal that gives America full advantage without a fight for equality and mutual respect etc. For one thing China is a much bigger country with far more land and people and it doesn't host US troops and is not a vassal of the US Empire. The other fact is Japan never surpassed USA GDP PPP whilst China has broken that threshold back in 2014...

Trump's trade war is really about decoupling America from China as a means to contain China's continued rise. To their thinking, if things were let to play out under current status quo, it won't be long given current trends before China surpassess America as the world's dominant superpower. So given this perspective, to the US it would be better to cut all ties now, while the US is still technologically and militaristically ahead, than to continue business as usual and lead to the inevitable outcome of being supplanted as world #1 spot...

From China's perspective it realizes that America -- as the decling power -- has no intention of ever giving up the top spot and will do whatever it takes to contain or even reverse the rise of China... From the Chinese perspective One Belt One Road and Made in China 2025 are vital strategic projects to help ween it off American dependence/reliance and to create a new world order by ushering in a silk road 2.0 to bypass the need to confront the US blue water navy as America will try to blockage China's shipping routes etc during any time of tension or war...

For both sides there is this sort of "inflection point" and no one wants to lose the initiative, if China wants to ever become #1 it is now or never, no longer is valid the Deng doctrine of "bid your time", since America has in the last few years awakened to the fact that China may soon overtake it, so China's goal is to act fast and erode the US Petrodollar hegemony replacing it with its own BRI/OBOR/MIC2025 before America can fully cap its rise and ascendsion....

For the US, its goal is to decouple quickly enough from China, and to asymettrically target and destroy any tip of the spear Chinese companies/projects/tech such as the Huawei, 5G, DJI, EV, trains, etc etc to cripple China's plans to move up the value chain and hi-tech-ify its economy and to do so with enough force to set back China and permanently prevent it from successfully climbing the arch trajectory of replacing the US.

How will this most likely play out?
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Re: Predictions of US vs China hegemony long term

Unread postby GHung » Tue 03 Sep 2019, 15:03:24

...... China's plans to move up the value chain and hi-tech-ify its economy and to do so with enough force to set back China and permanently prevent it from successfully climbing the arch trajectory of replacing the US.


Methinks that train has pretty much left the station (horse left the barn, chicken flew the coop ........). About the only looming hindrance China has that I can see is the same one the US has. Massive debt.
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Re: Predictions of US vs China hegemony long term

Unread postby Outcast_Searcher » Tue 03 Sep 2019, 15:18:15

1). Clearly China will replace the US as the global dominant country in time. Numbers don't lie. Also, cultural differences like having most of the political leaders be engineers, etc. instead of lawyers is, IMO, an indication of a much smarter way of thinking, which helps make China's rise in power over time more certain, IMO.

It's demographics and math. To deny it is like denying science.

2). The whole worry about whether the global trading currency is the dollar or something else (including a supranational currency composed of some combination of national currencies) is completely irrelevant in the modern world.

The global FX markets trade a good $5 TRILLION on average daily. Any entity with financial means and a brain can construct/trade/hold ANY portfolio of currencies, long or short they want.

This is NOT the 70's, before fast reliable computers on a huge global network. All the harping on the petrodollar's demise meaning doom or even a meaningful issue for the US is as misplaced as all the other fast crash doomer nonsense, with a track record of roughly zero accuracy for several decades (as long as I've been paying any attention).
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Predictions of US vs China hegemony long term

Unread postby bochen777 » Tue 03 Sep 2019, 15:32:40

In an escalated Trade War China can ban rare earth exports to the US. This would cause some pain for America but it would be a single use tactic for the Chinese. Trump is wanting to buy Greenland for this exact reason.

Look at the Huawei issue, Huawei is a 'national security' threat to the US but not because of spying. Its more of the fact that if Huawei becomes #1 smartphone maker and also the #1 deployer of 5G/6G etc, it corners the telecommunications market and puts the US at a strategic intelligence disadvantage as well as an economic value chain disadvantage. It is about marketshare and hegemony.

China's fab is still years behind the US or the Taiwan TSMC... so even though Huawei says they design their own chips, it is still based on ARM and still fabbed by TSMC. US could tell Intel to stop shipping CPUs to China and that would cripple the nation to a large degree, perhaps more so than an rare earth ban would impact the US.

And then there is wildcards like AI, quantum computing, peak oil / deminishing eroei..... if AI doesn't progress as fast as people hope and if Peak Oil is real, then it would be a brutal zero sum game and a sort of fight to the death mad max style between the world's powers...
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Re: Predictions of US vs China hegemony long term

Unread postby Newfie » Wed 04 Sep 2019, 08:00:19

I don’t think it is all so simple.

The USA’s rise to power was due to a vast store of untapped resources, a very large country/population compare to then rivals, and those rivals going to war with one another.

China does not have this pool of untapped resources. It has a large population but is struggling hard to feed them. Even if China feeds itself from alternative sources the price of cereals will rise putting pressure on China and bolstering the USA.

The World is largely at peace, lots of little conflicts but the USA is in no major battle.

I acknowledge that there are forces promoting China. I’m far from certain it will actually take over. And besides India has their own ideas which won’t favor China.
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Re: Predictions of US vs China hegemony long term

Unread postby ralfy » Wed 04 Sep 2019, 09:56:14

It's not just decoupling from China but facing the effects of such on the dollar as a reserve currency.
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Re: Predictions of US vs China hegemony long term

Unread postby Outcast_Searcher » Wed 04 Sep 2019, 13:43:53

bochen777 wrote:In an escalated Trade War China can ban rare earth exports to the US. This would cause some pain for America but it would be a single use tactic for the Chinese. Trump is wanting to buy Greenland for this exact reason.

...

And then there is wildcards like AI, quantum computing, peak oil / deminishing eroei..... if AI doesn't progress as fast as people hope and if Peak Oil is real, then it would be a brutal zero sum game and a sort of fight to the death mad max style between the world's powers...

1). There are relative shortages of various resources in different regions of the world. Same as it ever was. There are also mitigating factors like economics (pricing power and incentives), substitution, etc. There are LOTS of rare earth metals in various parts of the world, including the seabed near Japan, if the price is right. Relax.

2). The peak oilers have been proclaiming doom for decade re running out of oil. Again, substitution. Add technology. Think EV's, for example. Oh, and think ever increasing production and supplies for four decades. If peak oil is you're biggest worry, you're in the pink.

3). Yes, the world changes. Technology changes. Why panic over every buzzword like AI? Nothing better to do?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Predictions of US vs China hegemony long term

Unread postby Outcast_Searcher » Wed 04 Sep 2019, 13:47:34

ralfy wrote:It's not just decoupling from China but facing the effects of such on the dollar as a reserve currency.

Reading comprehension isn't much of a thing with you, is it?

Go ahead. By all means. Demonstrate how if the dollar is replaced over time as the global reserve currency it means insta-doom. Try using real world economic principles instead of hysterical doomer nonsense.

Meanwhile, (AGAIN), in the real world, the FX markets let anyone with financial means and a brain hold ANY combination of major currencies, long or short, and change it any time they want.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Predictions of US vs China hegemony long term

Unread postby bochen777 » Wed 04 Sep 2019, 16:31:40

Lets say you flip houses to make more money in a good era condusive to such real estate entrepaneuership things, you start small but then grow larger and pretty soon you amass dozens of houses for rentals and it all snowballs and accumulates.. eventually you saturate the market and become a victim of your own success as continued perpetual growth is impossible in a finite environment as is the notion that such business plan is scale invariant or that it always scales up forever...

The FX markets etc that you talks about is fine at the level of individual investors, funds, copmanies and even larger scale congolmerates... but at the scale of the nation state it is entirely different altogether when applying it to somehow dispel the notion of the geopolitical and macroeconomic impact of America losings it petrodollar hegemony... Its the same reason that hypothetically you could be the best stock market trader in the world, much better than Warren Buffet etc but eventually you will grow too big to continue to make the sort of % returns that you started out with when smaller...

The dollar is like a platform that America exclusively controls via the right to sanction others (backed by the force of its strong military) and the exclusive right to print/mint dollars/digits via Fed/Quantitative Easing etc... It is a double edged sword that on one hand America forces others to use the dollar else regieme change (Saddam, Iran, Venezula etc) and on the other hand it enables America to economically cripple nations that don't kowtow to them by applying direct and secondary sanctions against them. (often making the arguement that these sanctioned nations have unlawfully used American owned financial instruments (aka US dollar) in their dealings/trade with other nations and hence these nations should be 'reigeme changed' and also collaterially threatening other nations that dare trade with them or go against the US sanctions) The kidnapping of the Huawei CFO was based on the grounds that Huawei did business with Iran using dollars, and the pushback against China for continuing to buy oil from the US sanctioned Iran is also because it involves trade with Dollars. So it allows the US to essentially weaponize the dollar as a means of conducting economic warfare against other nations, not to mention it is a form of global usury as it unlawfully 'taxations' the globe and it dilutes the effects of inflation at home by wiping out the purchasing power of the dollars held/saved by other nations and entities abroad.
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Re: Predictions of US vs China hegemony long term

Unread postby Newfie » Wed 04 Sep 2019, 17:33:38

^ Thanks for that description.
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Re: Predictions of US vs China hegemony long term

Unread postby Outcast_Searcher » Thu 05 Sep 2019, 01:11:07

bochen777 wrote:The dollar is like a platform that America exclusively controls via the right to sanction others (backed by the force of its strong military) and the exclusive right to print/mint dollars/digits via Fed/Quantitative Easing etc... It is a double edged sword that on one hand America forces others to use the dollar else regieme change (Saddam, Iran, Venezula etc) and on the other hand it enables America to economically cripple nations that don't kowtow to them by applying direct and secondary sanctions against them. (often making the arguement that these sanctioned nations have unlawfully used American owned financial instruments (aka US dollar) in their dealings/trade with other nations and hence these nations should be 'reigeme changed' and also collaterially threatening other nations that dare trade with them or go against the US sanctions) The kidnapping of the Huawei CFO was based on the grounds that Huawei did business with Iran using dollars, and the pushback against China for continuing to buy oil from the US sanctioned Iran is also because it involves trade with Dollars. So it allows the US to essentially weaponize the dollar as a means of conducting economic warfare against other nations, not to mention it is a form of global usury as it unlawfully 'taxations' the globe and it dilutes the effects of inflation at home by wiping out the purchasing power of the dollars held/saved by other nations and entities abroad.

I think you're confusing military power and dollars.

So if Huawei had used gold instead of dollars, it would have been fine? Of course not. It was about the sanctions on Iran, and that Huawei violated those.

Re Iraq, the US was after regime change because of Hussein used weapons of mass destruction, not to force the use of dollars. (I looked it up, re Google.)

If the US "wiped out" the purchasing power of dollars, it would wipe out it's own economy, so you seem confused on that point. Dollars have value, because on the FX markets people want them at some value relative to other currencies. Not because of some artificial US dictate. And with the FX markets, people can change their mind about the value of a dollar, and trade it at a blink of an eye -- not because of some artificial US dictate.

...

If you're going to state a bunch of economic theories, why not back them up with credible links?

Like it or not, with the FX markets, if people and countries decide they don't want dollars, the dollar will plummet, and people will prefer other currencies.

If the US wants to impose sanctions, those are enforced by the military.

If tomorrow or in 20 years, the world decides to do international trade in another currency, I don't see that changing.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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