China Economy: News & Discussion

[nimo_cn]

Which countries will support China in such a situation right now?

well, we can't expect them to support China, that would be unrealistic, we just hope the rest of them to be neutral.

 

[nimo_cn]

It is time that you play hard ball with Mr. Trump, aka Mr. Boeing and ban all sales of American aircraft immediately. Grab the 50 cent army and take up the call! It is really the only card you have to play.

come on, have some patience.

it's gonna be a war which may last 20 years, why show all the cards at the very beginning.

China may not have many cards as America, we have to admit that America has more powerful cards to play, after all we are dealing with the sole super power. but we can play our cards more smart and more patient.

And a war like this one is not just about strength and power but also about will and resolution. we have the ability to hurt America pretty bad, of course they can hurt China even worse. more importantly, China is willing to take as much loss as it's necessary to defend our core interest. how much loss is America willing to take to defeat China?

 

[indiatester]

well, we can't expect them to support China, that would be unrealistic, we just hope the rest of them to be neutral.

Hence my comment, China needs to build more friends to handle such situations.

 

[Haldiram]

And a war like this one is not just about strength and power but also about will and resolution. we have the ability to hurt America pretty bad, of course they can hurt China even worse. more importantly, China is willing to take as much loss as it's necessary to defend our core interest. how much loss is America willing to take to defeat China?

I see, some lessons have been learnt from Vietnam

 

[jadoogar]

china banning Boeing makes no difference. There are other buyers including many in Europe.

China does not have much of an aviation market anyway. I suspect that the numbers are made up. Also from the days when they had reckless trade surpluses - that gave them access to lots of low cost cash in USD. So they used a portion of that cash to get into aircraft leasing. Therefore many of the aircraft that they do buy are actually destined for other customers across the world but the Chinese pretend that these purchases are for the domestic market.

 

[Armand2REP]

Which countries will support China in such a situation right now?

Chinese companies have found an easy way around US tariffs. They are buying shell companies in Vietnam that repackage the products and ship it to the US. The only companies hurting are American companies that offshored to China. Those companies are moving to Mexico so everything Trump is doing is just political grandstanding for the 2020 election. As Chinese disposable income has collapsed they are not buying as many cars or smartphones as they used to and the tariffs are just riding the end of the wave of China's slowing economy. The only Trump card China has to play is Boeing.

 

[nimo_cn]

Chinese companies have found an easy way around US tariffs. They are buying shell companies in Vietnam that repackage the products and ship it to the US. The only companies hurting are American companies that offshored to China. Those companies are moving to Mexico so everything Trump is doing is just political grandstanding for the 2020 election. As Chinese disposable income has collapsed they are not buying as many cars or smartphones as they used to and the tariffs are just riding the end of the wave of China's slowing economy. The only Trump card China has to play is Boeing.

China has more cards than you can imagine, Boeing is just one of them. And people should understand that the cards America is playing to hurt China is also hurting American companies. Most of the American companies that are ordered to stop supplying components to huawei are also suffering the plunging of stock prices, while Chinese companies that could be potential suppliers to huawei are enjoying price rising. As someone has pointed out, embargoing huawei might be an opportunity for China to create an independent industry ecosystem, it's yet to determine how effective Trump's measures are.

Sales of smartphone and automobile are slowing across the world, it's a normal economic cycle, simply because the market is saturating, China is no exception.

 

[Armand2REP]

China has more cards than you can imagine, Boeing is just one of them. And people should understand that the cards America is playing to hurt China is also hurting American companies. Most of the American companies that are ordered to stop supplying components to huawei are also suffering the plunging of stock prices, while Chinese companies that could be potential suppliers to huawei are enjoying price rising. As someone has pointed out, embargoing huawei might be an opportunity for China to create an independent industry ecosystem, it's yet to determine how effective Trump's measures are.

Sales of smartphone and automobile are slowing across the world, it's a normal economic cycle, simply because the market is saturating, China is no exception.

You certainly didn't list any other cards China might have to play. Go ahead and list them so they can be debunked.

Huawei has a serious problem with HiSilicon relying on ARM licenses and sourcing most components from abroad, even if not directly from the US. All companies would rather stop selling to Huawei than suffer US sanctions. It would be interesting to see if HiSilicon could develop a new architecture for mobile devices that doesn't rely on ARM CPU or GPU designs. Losing Google in China means nothing as they were kicked out long ago, it only kills international sales. As Android is open source they will just continue using it with 3rd party Chinese app stores as they have always done.

Sales of smartphones and automobiles have contracted worldwide because they have collapsed in China which has been the largest purchaser of them. It is the collapse of sales in China being the cause of a worldwide decline, not the rest of the world declining.

 

[nimo_cn]

You certainly didn't list any other cards China might have to play. Go ahead and list them so they can be debunked.

Huawei has a serious problem with HiSilicon relying on ARM licenses and sourcing most components from abroad, even if not directly from the US. All companies would rather stop selling to Huawei than suffer US sanctions. It would be interesting to see if HiSilicon could develop a new architecture for mobile devices that doesn't rely on ARM CPU or GPU designs. Losing Google in China means nothing as they were kicked out long ago, it only kills international sales. As Android is open source they will just continue using it with 3rd party Chinese app stores as they have always done.

Sales of smartphones and automobiles have contracted worldwide because they have collapsed in China which has been the largest purchaser of them. It is the collapse of sales in China being the cause of a worldwide decline, not the rest of the world declining.

what are you smoking? only sales in china are declining? then what are these?

Smartphone Shipments Experience Deeper Decline in Q1 2019 with a Clear Shakeup Among the Market Leaders, According to IDC
https://www.idc.com/getdoc.jsp?containerId=prUS45042319
From a geographic standpoint, while the China market will likely be challenged for the remainder of 2019, it was the U.S. market that felt the worst of the downturn in 1Q19. Smartphone volumes declined 15% year over year during the quarter as replacement rates continue to slow in one of the world's largest markets.

https://www.autonews.com/sales/sales-weakest-start-5-years
U.S. light-vehicle sales are off to the slowest start for a year since 2014. February sales declined 2.9 percent to 1.27 million vehicles, and the industry's annualized selling rate fell to its lowest level in 18 months.

ARM is not an american company, it is not binded by the executive order issued by Trump, which can only be applied to companies located in America. To date, I am positive to say that the executive order is not working out as americans have expected. If American government take actions to coerce companies outside US, most of which are owned by american allies, to stop doing business with Huawei, that is another level. So far no companies without America have expressed willingness to join the league to embargo Huawei. And it is not going to be an easy task for americans. To persuade their allies to discard Huawei equipments has not been a total success, much less to coerce them stop making money from selling components to Huawei. And if that day comes that America had successfully got ARM to join them, we will see how Huawei is gonna handle it,

As I understand it, Google's ban on Huawei does not mean that huawei phone can access Google services(map, youtube, gmail) anymore, it is more like that users can't install apps (including google's apps) through Google play, which i have to admit is a pretty hard hit to huawei since Google play is basically the only way by default non-chinese android users install apps. huawei phone could switch to open source android or its own back OS and users could install apps through a third party appstore, it is impossible to change user's habit overnight. so yes, Google ban is likely to devastate huawei's smartphone business abroad in a short term. However, it won;t affect Huawei's core business 5G. One must understand, smartphone business didn't become important to huawei until recent years. in 2009, huawei actually decided to sell its phone department but failed because no other companies were willing to take over. And the volume of Chinese market alone can sustain huawei's phone business to survive. Google's ban is a wake up call to huawei and other Chinese phone makers, I believe in the following years, we will see them decrease the dependence on Google's software. Richard Yu, the man who is heading huawei smartphone business just announced that smartphone runs on its own OS will be launched this fall.

Another important news from China, Xi jingpi visited Ganzhou( badguy2000's hometown) in Jiangxi Province, to inspect the production of rare earth.

 

[Armand2REP]

what are you smoking? only sales in china are declining? then what are these?

Considering the entire global decline of smartphones for 2018 was fully attributed to China selling 70 million less smartphones, it was all China's fault. The rest of the world averaged didn't decline at all.

ARM is not an american company, it is not binded by the executive order issued by Trump, which can only be applied to companies located in America. To date, I am positive to say that the executive order is not working out as americans have expected. If American government take actions to coerce companies outside US, most of which are owned by american allies, to stop doing business with Huawei, that is another level. So far no companies without America have expressed willingness to join the league to embargo Huawei. And it is not going to be an easy task for americans. To persuade their allies to discard Huawei equipments has not been a total success, much less to coerce them stop making money from selling components to Huawei. And if that day comes that America had successfully got ARM to join them, we will see how Huawei is gonna handle it,

ARM is a company built on patents, most of which are owned by US companies. They cannot issue a license to anyone on a US sanctions list or they will lose the ability to use US patents. Such is the case for most smartphone suppliers which is what makes US sanctions so devastating.

As I understand it, Google's ban on Huawei does not mean that huawei phone can access Google services(map, youtube, gmail) anymore, it is more like that users can't install apps (including google's apps) through Google play, which i have to admit is a pretty hard hit to huawei since Google play is basically the only way by default non-chinese android users install apps. huawei phone could switch to open source android or its own back OS and users could install apps through a third party appstore, it is impossible to change user's habit overnight. so yes, Google ban is likely to devastate huawei's smartphone business abroad in a short term. However, it won;t affect Huawei's core business 5G. One must understand, smartphone business didn't become important to huawei until recent years. in 2009, huawei actually decided to sell its phone department but failed because no other companies were willing to take over. And the volume of Chinese market alone can sustain huawei's phone business to survive. Google's ban is a wake up call to huawei and other Chinese phone makers, I believe in the following years, we will see them decrease the dependence on Google's software. Richard Yu, the man who is heading huawei smartphone business just announced that smartphone runs on its own OS will be launched this fall.

Most apps on Play Store require Google Services to authenticate them. If you have ever tried sideloading APKs on a Chinese phone you usually find that the app won't run because it doesn't have Google Services running. Chinese devs have made plenty of clones of these apps for the domestic market that don't require it but they can't ship those internationally or they will be sued into oblivion for IP theft. Huawei is done on the 5G front as all of the patents come from the US, without licenses for them they can't legally sell anything.

I am sure they will continue with IP theft for the domestic market but as soon as the try selling something abroad, the US will shut it down.

 

[Vijyes]

Most apps on Play Store require Google Services to authenticate them. If you have ever tried sideloading APKs on a Chinese phone you usually find that the app won't run because it doesn't have Google Services running. Chinese devs have made plenty of clones of these apps for the domestic market that don't require it but they can't ship those internationally or they will be sued into oblivion for IP theft. Huawei is done on the 5G front as all of the patents come from the US, without licenses for them they can't legally sell anything.

I am sure they will continue with IP theft for the domestic market but as soon as the try selling something abroad, the US will shut it down.

Why do you think making another app with similar feature difficult? Don't you see people buying phones with limited apps? As long as some key apps like Whatsapp, truecaller or other networking apps are available, it is all fine. People really don't mind using default camera, voice recorder or other apps. Moreover, this is just a short term problem and will recover in the long run.

IP theft hardly matters if the apps are running out of USA systems. Do you think countries like India will enforce IP of some random playstore app? All one has to do is sell it in some non-USA platform and may be change some lines of the codes. What matters more is the idea, not the code as code can be written in different manner to get very similar results. The idea can't be copyrighted easily in countries like India. So, IP becomes moot

 

[Armand2REP]

Why do you think making another app with similar feature difficult? Don't you see people buying phones with limited apps? As long as some key apps like Whatsapp, truecaller or other networking apps are available, it is all fine. People really don't mind using default camera, voice recorder or other apps. Moreover, this is just a short term problem and will recover in the long run.

IP theft hardly matters if the apps are running out of USA systems. Do you think countries like India will enforce IP of some random playstore app? All one has to do is sell it in some non-USA platform and may be change some lines of the codes. What matters more is the idea, not the code as code can be written in different manner to get very similar results. The idea can't be copyrighted easily in countries like India. So, IP becomes moot

I don't see people buying Huawei smartphones with limited features, that is why there are much cheaper feature phones. If they can't get Play Store they aren't going to buy it as it is just a feature phone without it. There are some things that can be sideloaded but the average consumer isn't going to do all of that.

IP theft isn't going to be on Play Store which means no one will use it. If it did become large enough to show up on the radar they would shut it down. Many of my favourite sideloaded apps have disappeared this way.

 

[nimo_cn]

Considering the entire global decline of smartphones for 2018 was fully attributed to China selling 70 million less smartphones, it was all China's fault. The rest of the world averaged didn't decline at all.



ARM is a company built on patents, most of which are owned by US companies. They cannot issue a license to anyone on a US sanctions list or they will lose the ability to use US patents. Such is the case for most smartphone suppliers which is what makes US sanctions so devastating.



Most apps on Play Store require Google Services to authenticate them. If you have ever tried sideloading APKs on a Chinese phone you usually find that the app won't run because it doesn't have Google Services running. Chinese devs have made plenty of clones of these apps for the domestic market that don't require it but they can't ship those internationally or they will be sued into oblivion for IP theft. Huawei is done on the 5G front as all of the patents come from the US, without licenses for them they can't legally sell anything.

I am sure they will continue with IP theft for the domestic market but as soon as the try selling something abroad, the US will shut it down.

I am not sure how ARM have got its patents, because it doesn't matter. But It's for sure that ARM, as a British company, is not subject to executive order issued by Trump. To get companies like ARM to cut off business with huawei, American government has to work harder.

But I am not gonna argue that Google's ban won't hurt huawei, because It definitely will. the tricky thing is how bad the hurt is gonna be, I have said that smartphone business is not huawei's core business, and losing the smartphone market abroad is not deadly to huawei's smartphone business. And the scenario you suggest where US can shut down huawei's smartphone sale abroad is yet to come. So in order to defeat huawei, the way they defeat ZTE, US needs to take more extreme actions.

 

[Vijyes]

I don't see people buying Huawei smartphones with limited features, that is why there are much cheaper feature phones. If they can't get Play Store they aren't going to buy it as it is just a feature phone without it. There are some things that can be sideloaded but the average consumer isn't going to do all of that.

If the phone has big screen, big camera and other hardware of smartphone like touchscreen etc, people will use it. There are several phones which are smartphones but don't have Google or Apple appstore. Large number of phones made by ViVo with ViVo appstores are sold in India. Samsung appstore is also somewhat popular. Most people are not tech savvy and just want to use a good phone for Whatsapp, internet, camera and songs. So, as long as there are sufficient choices for apps available, it does not matter whether it is google or not.

This is how people migrate from android to Apple phones too. If people were so entrenched in appstore, they would not migrate to other platforms. Now,making large number of apps will be difficult all of a sudden. But as long as important apps are provided, it will be fine to most people. Rest, the cost advantage of lower priced chinese parts will lay an incentiviser.

IP theft isn't going to be on Play Store which means no one will use it. If it did become large enough to show up on the radar they would shut it down. Many of my favourite sideloaded apps have disappeared this way.

If an app similar to say, titanium backup is made by chinese and uploaded in a Chinese appstore, what can anyone do to shut it down? There is hardly any IP for measly apps, at least in countries like India.


The main disadvantage here is unavailability of Google sites like YouTube. YouTube has no substitute and banning youTube app can become harmful as no alternative is possible in near future to the vast collection of videos there. So, more than IP, it is the monopoly of Google or USA firms in some area that is main pain point

 

[Armand2REP]

I am not sure how ARM have got its patents, because it doesn't matter. But It's for sure that ARM, as a British company, is not subject to executive order issued by Trump. To get companies like ARM to cut off business with huawei, American government has to work harder.

But I am not gonna argue that Google's ban won't hurt huawei, because It definitely will. the tricky thing is how bad the hurt is gonna be, I have said that smartphone business is not huawei's core business, and losing the smartphone market abroad is not deadly to huawei's smartphone business. And the scenario you suggest where US can shut down huawei's smartphone sale abroad is yet to come. So in order to defeat huawei, the way they defeat ZTE, US needs to take more extreme actions.

Of course it matters, check out the latest news...

Huawei: ARM memo tells staff to stop working with China’s tech giant
By Dave LeeNorth America technology reporter

• 3 hours ago

Image captionHuawei unveiled new phones powered by ARM-based chips, on Tuesday

UK-based chip designer ARM has told staff it must suspend business with Huawei, according to internal documents obtained by the BBC.

ARM instructed employees to halt "all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries to comply with a recent US trade clampdown.

ARM's designs form the basis of most mobile device processors worldwide.

In a company memo, it said its designs contained “US origin technology”.

As a consequence, it believes it is affected by the Trump administration's ban.

One analyst described the move, if it became long-term, as an “insurmountable” blow to Huawei’s business.

He said it would greatly affect the firm's ability to develop its own chips, many of which are currently built with ARM’s underlying technology, for which it pays a licence.

Cambridge-headquartered ARM had been described as the UK's largest tech firm until its takeover by a Japanese fund. It employs 6,000 workers and lists eight offices in the US.

In a statement it said it was "complying with all of the latest regulations set forth by the US government”, but declined to comment further.

Huawei has issued a brief statement of its own.

"We value our close relationships with our partners, but recognise the pressure some of them are under, as a result of politically motivated decisions," it said.

"We are confident this regrettable situation can be resolved and our priority remains to continue to deliver world-class technology and products to our customers around the world."

https://www.bbc.com/news/technology-48363772

______________________________________________

That means no more Kirin processors.

 

[nimo_cn]

Of course it matters, check out the latest news...

Huawei: ARM memo tells staff to stop working with China’s tech giant
By Dave LeeNorth America technology reporter

• 3 hours ago

Image captionHuawei unveiled new phones powered by ARM-based chips, on Tuesday

UK-based chip designer ARM has told staff it must suspend business with Huawei, according to internal documents obtained by the BBC.

ARM instructed employees to halt "all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries to comply with a recent US trade clampdown.

ARM's designs form the basis of most mobile device processors worldwide.

In a company memo, it said its designs contained “US origin technology”.

As a consequence, it believes it is affected by the Trump administration's ban.

One analyst described the move, if it became long-term, as an “insurmountable” blow to Huawei’s business.

He said it would greatly affect the firm's ability to develop its own chips, many of which are currently built with ARM’s underlying technology, for which it pays a licence.

Cambridge-headquartered ARM had been described as the UK's largest tech firm until its takeover by a Japanese fund. It employs 6,000 workers and lists eight offices in the US.

In a statement it said it was "complying with all of the latest regulations set forth by the US government”, but declined to comment further.

Huawei has issued a brief statement of its own.

"We value our close relationships with our partners, but recognise the pressure some of them are under, as a result of politically motivated decisions," it said.

"We are confident this regrettable situation can be resolved and our priority remains to continue to deliver world-class technology and products to our customers around the world."

https://www.bbc.com/news/technology-48363772

______________________________________________

That means no more Kirin processors.

Well, kirin processors will keep coming out, just without ARM's contribution.

The way I look at it, Americans are basically forcing Chinese to continue the Made in China 2025 plan, which they have strongly opposed. It seems to me that Made in China 2025 is our only way out.

 

[Bhadra]

what a load of crap! if HUAWEI was a PLA front, then what are companies like Google, Facebook, YouTube, Apple, Yahoo, etc, which are the backbone of NSA's prism project?

So you admit that Huawei like google is a front for PLA and there is nothing wrong in it if Apple etc are doing that !

 

[lcafanboy]

Well, kirin processors will keep coming out, just without ARM's contribution.

That means they will suck...:biggrin2:

The way I look at it, Americans are basically forcing Chinese to continue the Made in China 2025 plan, which they have strongly opposed. It seems to me that Made in China 2025 is our only way out.

Meaning chinese will reverse engineer or make Xerox copies of everything without any regards for IPRs...

 

[Vijyes]

People forget that China has one power - rare earth minerals. If USA presses beyond a point, China may use its rare earth minerals as a tool for punching USA. USA technology sanctions and Chinese rare earth minerals sanctions are equally potent tools and hence the strength of USA is nullified.

Xi Jinping may have showed how he plans to cripple US tech and defense giants in the trade war with a visit to a Chinese magnet factory


Xi Jinping, China's president, may have deliberately revealed how he plans to strike back at the US in the trade war by taking a trip to a magnet factory in the east of the country Monday.

Xi on Monday visited the factory of JL MAG Rare-Earth in Ganzhou city, eastern China, where he learned about the "production process and operation" of the company, "as well as the development of the rare earth industry," the state-run Xinhua news agency reported. JL MAG Rare-Earth specializes in magnetic rare earth elements.

He was accompanied by Vice Premier Liu He, the country's top economics adviser who has been leading trade negotiations with his US counterparts, Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin.

Presidents Xi and Donald Trump (far left, far right) at a working dinner in Buenos Aires, Argentina, in December 2018. Vice Premier Liu is immediately to Xi's left. The two men are embroiled in a bitter trade war.
Reuters/Kevin Lamarque
Xi's highly-publicized attention on the country's rare earths suggests that he could use the product to cripple the US tech and military industries, and make President Donald Trump's administration back down in their yearlong trade war.

Rare earth materials consist of 17 elements on the periodic table, which can be found in products critical to the US's manufacturing, tech, and defense industries.

The minerals are found in products from batteries and flame retardants to smartphones, electric cars, and fighter jets, according to Reuters andthe Financial Times. They are used in tiny amounts, but can be crucial to the manufacturing process.

"It's signalling they know it's not only important to US high-tech industries — electric vehicles, wind — but also defence. That's the message they're trying to get out," Ryan Castilloux, managing director of Adamas Intelligence, a rare earths consultancy told the Financial Times.

Tesla CEO Elon Musk stands by one of his company's cars. Rare earth materials can be found in Teslas.
What rare earths mean to China and the US
China is the world's largest supplier of rare earth materials — accounting for 90% of global production — and the US relies on it for 80% of its rare earth imports, the South China Morning Post andBloomberg reported.

China's state-run Global Times tabloid described Xi's Monday visit as the leader's "huge support to the critical industry that has been widely viewed as a form of leverage for China in the trade war with the US, but one that also faces issues that need to be addressed."

Rare earths, clockwise from top center: Praseodymium, cerium, lanthanum, neodymium, samarium and gadolinium.
U.S. Department of Agriculture / Peggy Greb
The Trump administration chose not to impose tariffs on Chinese imports of rare earth materials in its latest tariff lists, showing its reliance on China for the materials.

The US raised tariffs to 25% from 10% on $200 billion worth of Chinese goods on May 10, and drew up a prospective tariff list on another $300 billion worth of goods days later.

Trump and Xi in Mar-a-Lago, Florida, in April 2017.
AP
China also said earlier this month that it would raise duties on $60 billion worth of American goods starting June 1, resulting in duties of 5% to 25%.

There is also "growing speculation" that China could ban the export of rare earths to retaliate against the US, the South China Morning Post reported.

Stocks in companies working with rare earth elements skyrocketed after Xi's visit, with the rally continuing into end of trading on Tuesday.

China has weaponized its exports of rare earths in the past. In 2010, Beijing cut off rare earth exports to Japan amid a maritime dispute that saw a Chinese boat captain captured by Japanese authorities.

The export ban was so powerful that Japan immediately released the captain in what The New York Times described at the time as "a concession that appeared to mark a humiliating retreat in a Pacific test of wills."

In 2011, the House Committee on Foreign Affairs voiced concerns over China's ability to use rare earth exports in its foreign policy, in a hearing titled: "China's monopoly on rare earths: Implications for US foreign and security policy."

 

[Armand2REP]

People forget that China has one power - rare earth minerals. If USA presses beyond a point, China may use its rare earth minerals as a tool for punching USA. USA technology sanctions and Chinese rare earth minerals sanctions are equally potent tools and hence the strength of USA is nullified.

Rare earth elements are not actually rare at all. The West stopped mining it because it was environmentally damaging and the cost of cleaning it up made the elements expensive. China did not enforce such environmental regulations making it cheaper to produce than anywhere else making it unprofitable to mine. If China embargoes it then it will be profitable to mine again. China tried doing this in 2010 and failed when they controlled 97% of the market, since then mines have been opening up all over the world and China's share is down to 60%. An embargo would simply force them out of the #1 spot as the mines already opened expand production to make more money.

https://www.statista.com/statistics/279953/rare-earth-production-in-china-and-outside/