Breaking: Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales

[beijingwalker]

Empireal over reach.



Yes, but a side affect for the mid to long term will be high inflation, that will lead to lower living standards for the middle class in America.

The only way that the manufacturing can go back to US is US goes back to a developing country, it seems like it's already going this way.

 

[Shotgunner51]

USA is 2nd largest NET EXPORTER of goods in the world:

That's absolutely false bro. USA has NOT been a net exporter for decades, their trade deficit stricken economy is not even news. It is now the 1st largest NET IMPORTER of goods in the world.

World Bank Open Data

Free and open access to global development data

data.worldbank.org

 

[LeGenD]

Truly sad moments for US lovers


Nothing can challenge china's cheap labor force. That was why western companies transferred their production lines into China.

What can the west do after all?

Labor costs are increasing in China:

Trillora Packaging Solutions

Trillora Packaging Solutions, formerly Billerud Managed Packaging, offers customized packaging solutions to global brands and retail chains.

www.billerudkorsnas.com

China is shifting manufacturing to other countries including Pakistan and Bangladesh by extension. This was one of the objectives of CPEC in Pakistan in fact.

USA is adopting Tesla manufacturing model for domestic manufacturing (human-automation combination) in the present. If (or when) USD value globally depreciates, manufacturers will find ways to benefit from this dynamic and wages will be renegotiated down the road.

How U.S. Firms Benefit When the Dollar Falls

When the dollar is weak or falls, smart investors will benefit from investments in multinational companies.

www.investopedia.com

Global USD depreciation will motivate feedback loops and experts will jump in to provide suggestions for how to benefit from this dynamic:

Six reasons why the dollar may weaken, and 12 ways to profit from it

The catalysts that have kept the U.S. dollar strong might soon fade away, says Michael Brush.

www.marketwatch.com

Trump administration was the 1st to seek USD depreciation but Trade War with China failed to produce desired effects. USA had to do something else then.

Chinese leader Xi Jinping realized that China will have to consider economic restructuring after experiencing tensions with Trump administration.

 

[Wood]

China is shifting manufacturing to other countries including Pakistan and Bangladesh by extension. This was one of the objectives of CPEC in Pakistan in fact.

Chinese leader Xi Jinping realized that China will have to consider economic restructuring after experiencing tensions with Trump administration.

USA is adopting Tesla manufacturing model for domestic manufacturing (human-automation combination). Wages will be rebalanced down the road.

Unrelated to the Petro Yuan phenomenon, I think the human led manufacturing economies will crash in a decade or two. South Asian countries are playing a loosing game if they think that they can follow the Chinese model for growth. Better to exploit their competence in English language and move towards global service exports. This should be for all industries, not just for tech., back office and app development jobs that this word has become near synonymous to.

 

[Zsari]

Indeed.

Glad to see a member who understands these matters.

Americans have advocated for weaker USD before:

The benefits of a lower dollar: How the high dollar has hurt U.S. manufacturing producers and why the dollar still needs to fall further

The current decline in the dollar will provide a much-needed stimulus to the U.S. economy. The falling dollar will bring especially welcome relief to the internationally competitive U.S. manufacturing sector, which has suffered disastrous consequenceslost jobs, reduced profits, and decreased...

www.epi.org

Is a Strong Dollar Better than a Weak Dollar?

Americans were unable to control USD flows (and value by extension) but have found a solution finally. Putin gave it to them.

Weaker USD does not suggest that USA is finished. USA is 2nd largest NET EXPORTER of goods in the world:

Top exporting countries 2023 | Statista

China was, by far, the top exporting country in 2023. It exported for almost 1.4 trillion U.S. dollars more than second placed Untied States did.

www.statista.com

Weaker USD can facilitate American manufacturing industrial growth and employment generation.

China has benefitted much from a controlled Yuan on the other hand. Chinese manufacturing industries remained globally competitive by extension.

With more and more transactions shifting towards Yuan, its value will appreciate over time and this dynamic will have wider implications for Chinese manufacturing industries among other effects.

Long-term rise in China’s yuan could hurt economy: former top official

Guan Tao, a former senior official at the State Administration of Foreign Exchange, says long-term appreciation of the yuan could hurt job creation among small exporters, damaging efforts to boost domestic demand.

www.scmp.com

China will have to re-adjust its economic system by extension. There are trade-offs in this matter.

Things are moving towards this direction:

1. Global trade with USA will be in USD.

2. Global trade with China will be in Yuan.

Predicted effects:

1. USD globally depreciates (revival of American domestic manufacturing and increase in NET EXPORTS possible).

2. Yuan globally appreciates (economic restructuring as the way forward).

The dollar would have to crash to 20% of its current value for it to become competitive in manufacturing. That would be devastating for most American families.

 

[Muhammed45]

Labor costs are increasing in China:

Trillora Packaging Solutions

Trillora Packaging Solutions, formerly Billerud Managed Packaging, offers customized packaging solutions to global brands and retail chains.

www.billerudkorsnas.com

China is shifting manufacturing to other countries including Pakistan and Bangladesh by extension. This was one of the objectives of CPEC in Pakistan in fact.

Chinese leader Xi Jinping realized that China will have to consider economic restructuring after experiencing tensions with Trump administration.

USA is adopting Tesla manufacturing model for domestic manufacturing (human-automation combination). Wages will be rebalanced down the road.

How U.S. Firms Benefit When the Dollar Falls

When the dollar is weak or falls, smart investors will benefit from investments in multinational companies.

www.investopedia.com

There will be expert suggestions for how to profit from USD depreciation:

Six reasons why the dollar may weaken, and 12 ways to profit from it

The catalysts that have kept the U.S. dollar strong might soon fade away, says Michael Brush.

www.marketwatch.com

Trump administration was the 1st to seek USD depreciation but Trade War with China failed to produce desired effects.

USA had to do something else then.

I sincerely hope they do so sir.

The day Americans do that, they will feel the consequences of printing money out of thin air. They will be unable to shove dollar into other countries' central banks. And the inflation of printed money will bite them back.

 

[Shotgunner51]

Chinese leader Xi Jinping realized that China will have to consider economic restructuring after experiencing tensions with Trump administration.

USA is adopting Tesla manufacturing model for domestic manufacturing (human-automation combination). Wages will be rebalanced down the road.

Nope, China government officially launched "Made in China 2025" in May 2015 as part of prevailing 5-Year Plan, Trump wasn't even in the office.

Automation/Robotization (along with AI, super computing) is the future, but China's target is never US, but aim higher at ultra advanced industrialized economies like Japan, South Korea, Singapore and Germany. By now China captured 5400 robotics patents (43% share of world). In terms of deployment, 44% of world's yearly installed robots are in China. As per this speed of R&D and investment, China is expected to get closer to Japan or Germany automation levels by 2025, but of course on a much bigger scale.

Study: China Far Outpacing U.S. in Worldwide Robotics Patents

The U.S. is fourth in robotics patents, behind China, Japan and South Korea.

www.nextgov.com

 

[OldenWisdom...قول بزرگ]

The implications of reserve currency change have nothing to do with valuation. Valuation against Pegged reserve currency only helps an exporter keep their products sometimes artificially cheaper than it's competitors.

That is not the case when reserve status changes.
The world is full of U.S. inflation... the paper yet to hit the market is even higher in coming years and decades than it ever was prior to that... the reason being that U.S. financed endless deficits on the back of petro dollar. This deficit spending from Regan onwards kept U.S. supremacy in finance but most importantly in military industrial complex... in keeping the masses employed for producing a commodity with a one way ticket!

By Yuan becoming a reserve currency will allow the same leverage to Chinese... to run deficits and finance projects on the backs of their issued inflation.

 

[Luosifen]

Nope, China launched "Made in China 2025" in May 2015 as part of prevailing 5-Year Plan, Trump wasn't even in the office.

Automation is the future, but China's target is not US, but aim higher at more advanced industrialized economies like Japan, South Korea, Singapore and Germany. By now China captured 5400 robotics patents or a 43% share of world. In terms of deployment, 44% of world's newly installed robots are in China. China is expected to get closer to Japan or Germany level by 2025.

View attachment 824394View attachment 824395

Study: China Far Outpacing U.S. in Worldwide Robotics Patents

The U.S. is fourth in robotics patents, behind China, Japan and South Korea.

www.nextgov.com

China will have to install more domestically built robots considering the supply of imported German/Japanese robots are going to be limited by production cuts from high energy costs due to the Ukraine crisis and the sanctions on Russian energy.

 

[Shotgunner51]

China will have to install more domestically built robots considering the supply of imported German/Japanese robots are going to be limited by production cuts from high energy costs due to the Ukraine crisis and the sanctions on Russian energy.

Chinese companies (e.g. Siasun Robotics) are fast progressing in R&D and increasing their supply. The "Big 4" international companies either have local production (FANUC and Yaskawa of Japan, ABB of Switzerland) here, or is already acquired by Chinese capital (KUKA Germany acquired by China Midea Group).

 

[QWECXZ]

Indeed.

Glad to see a member who understands these matters.

Americans have advocated for weaker USD before:

The benefits of a lower dollar: How the high dollar has hurt U.S. manufacturing producers and why the dollar still needs to fall further

The current decline in the dollar will provide a much-needed stimulus to the U.S. economy. The falling dollar will bring especially welcome relief to the internationally competitive U.S. manufacturing sector, which has suffered disastrous consequenceslost jobs, reduced profits, and decreased...

www.epi.org

Is a Strong Dollar Better than a Weak Dollar?

Americans were unable to control USD flows (and value by extension) but have found a solution finally. Putin gave it to them.

Weaker USD does not suggest that USA is finished. USA is 2nd largest NET EXPORTER of goods in the world:

Top exporting countries 2023 | Statista

China was, by far, the top exporting country in 2023. It exported for almost 1.4 trillion U.S. dollars more than second placed Untied States did.

www.statista.com

Weaker USD can facilitate American manufacturing industrial growth and employment generation.

China has benefitted much from a controlled Yuan on the other hand. Chinese manufacturing industries remained globally competitive by extension.

With more and more transactions shifting towards Yuan, its value will appreciate over time and this dynamic will have wider implications for Chinese manufacturing industries among other effects.

Long-term rise in China’s yuan could hurt economy: former top official

Guan Tao, a former senior official at the State Administration of Foreign Exchange, says long-term appreciation of the yuan could hurt job creation among small exporters, damaging efforts to boost domestic demand.

www.scmp.com

China will have to re-adjust its economic system by extension. There are trade-offs in this matter.

Things are moving towards this direction:

1. Global trade with USA will be in USD.

2. Global trade with China will be in Yuan.

Predicted effects:

1. USD globally depreciates (revival of American domestic manufacturing and increase in NET EXPORTS possible).

2. Yuan globally appreciates (economic restructuring as the way forward).

Dude, everyone understands that. It's not like rocket science. Yeah, the US exports will likely increase when the USD depreciates and their production will likely increase too, but how are they going to control the crazy inflation that is going to hit them?

And even an increase in the US exports should not be taken for granted. The US exports will increase only if they can maintain their technological superiority over other competitors, but China is threatening even that these days. What if China surpasses the US in technology and industry? What if the US fails to attract the best human resources in the world after the collapse of the USD? The US economy is very attractive for highly-skilled immigrants now. Will it continue to remain attractive when dollar is like one-tenth of its today's value? What can the US export to other countries to rise again in the absence of a highly-skilled labor force?

The US economy is powered by top-notch professionals who choose to live there for high wages and the opportunity to work at the very edge of technology and science. The Americans themselves can hardly afford to go to college with the insane tuition fees of the US academic institutions. If the US stops being an attractive spot for the world's most talented people, the Americans themselves are unlikely to be able to fill the void.

Also, what are they going to do with 23 trillion dollars (and counting) of their foreign debt when nobody accepts to be paid back in the USD anymore?

It doesn't mean that the US will be finished as a country and they will turn into Somalia. But this would certainly end the US dominance over the world's economy as a super power and it will turn the US into another UK at best. If it weren't for the UN structure after the World War II, the Great Brain who just a century ago was the most formidable colonial empire that the world had ever seen, would've been nothing more than a middle power today. The same fate is awaiting the US. And the clock started ticking at least a decade ago.

 

[m52k85]

Labor costs are increasing in China:

Trillora Packaging Solutions

Trillora Packaging Solutions, formerly Billerud Managed Packaging, offers customized packaging solutions to global brands and retail chains.

www.billerudkorsnas.com

China is shifting manufacturing to other countries including Pakistan and Bangladesh by extension. This was one of the objectives of CPEC in Pakistan in fact.

USA is adopting Tesla manufacturing model for domestic manufacturing (human-automation combination) in the present. If (or when) USD value globally depreciates, manufacturers will find ways to benefit from this dynamic and wages will be renegotiated down the road.

How U.S. Firms Benefit When the Dollar Falls

When the dollar is weak or falls, smart investors will benefit from investments in multinational companies.

www.investopedia.com

Global USD depreciation will motivate feedback loops and experts will jump in to provide suggestions for how to benefit from this dynamic:

Six reasons why the dollar may weaken, and 12 ways to profit from it

The catalysts that have kept the U.S. dollar strong might soon fade away, says Michael Brush.

www.marketwatch.com

Trump administration was the 1st to seek USD depreciation but Trade War with China failed to produce desired effects. USA had to do something else then.

Chinese leader Xi Jinping realized that China will have to consider economic restructuring after experiencing tensions with Trump administration.

Mind boggling. It's like they have Ivy league graduates sit around a table and brainstorm how to continue US domination, there is consensus for need to renew US manufacturing and the fact that would need a weaker dollar, and then they are all silent as to how to make it so in a feasible manner, and then someone shouts out 'entice Putin to invade Ukraine!'

 

[Luosifen]

Chinese companies (e.g. Siasun Robotics) are fast progressing in R&D and increasing their supply. The "Big 4" international companies either have local production (FANUC and Yaskawa of Japan, ABB of Switzerland) here, or is already acquired by Chinese capital (KUKA Germany acquired by China Midea Group).

Hope those Chinese companies are fully independent of US and European IP and supply chain, otherwise they will be vulnerable to sanctions interrupting operations.

 

[Shotgunner51]

Hope those Chinese companies are fully independent of US and European IP and supply chain, otherwise they will be vulnerable to sanctions interrupting operations.

None of the major robotics companies is American, only a few are European let alone the largest of which (KUKA Germany) is already Chinese-owned and operations largely transferred to China.

 

[lcloo]

A weaker US dollar no doubt will make US export cheaper, but manufacturing will remain in countries with mature supply chain like in China, and in countries with cheap labour costs like in Vietnam, Bangladesh etc. Labour intensive manufacturing will keep moving from one developing country to another, but unlikely to return to USA.

The downside of cheaper USD for other countries is their foreign currency reserve will shrink if they put too much of their reserve in US Dollar.

The upside is for countries heavily burdened by USD denominated debts, provided their own currencies do not depreciate or remain at the same rate against USD as before.

And after US weaponised US dollar against Russia, more countries will look to Yuan and other currencies to avoid becoming future target of sanction from US. This will result in less demand of USD.