China becomes a source of inflation for the US

[Song Hong]

I have argued long time ago in every forum that China as a "currency manipulator" benefit US immensely while China pick up some crumps.

Being ripped off by US elites, the people of US are kept content by low cost China product. Meanwhile, US is able to print monies out of nothing to buy real stuff.

I was bashed by every single so call western trained economists.

Now as per wish of US, China let Yuan rise. Inflation coming to USA.

USA media on frenetic witch-hunting against China once more.

************

 

[Mk-313]

I have argued long time ago in every forum that China as a "currency manipulator" benefit US immensely while China pick up some crumps.

Being ripped off by US elites, the people of US are kept content by low cost China product. Meanwhile, US is able to print monies out of nothing to buy real stuff.

I was bashed by every single so call western trained economists.

Now as per wish of US, China let Yuan rise. Inflation coming to USA.

USA media on frenetic witch-hunting against China once more.

************

that’s not how it works. It hurts China more to let the yuan rise and make exports more expensive for the entire world. That’s why CCP is trying as hard as it can to devalue it again by increasing bank reserve to descrease dollars liquidity

www.scmp.com/economy/china-economy/article/3135919/chinas-yuan-slips-against-us-dollar-after-beijing-taps

www.cnbc.com/amp/2021/06/03/china-sets-yuan-rmb-weaker-vs-us-dollar-for-first-time-in-a-week.html

US labeled it a currency manipulator because US wants the yuan to rise because a rise in yuan is the only thing that can bring back outsourced jobs in China back to US. And slow chinas economic growth as other 3rd world countries start to look competitive

 

[Song Hong]

that’s not how it works. It hurts China more to let the yuan rise and make exports more expensive for the entire world. That’s why CCP is trying as hard as it can to devalue it again by increasing bank reserve to descrease dollars liquidity

scmp.com/economy/china-economy/article/3135919/chinas-yuan-slips-against-us-dollar-after-beijing-taps

www.cnbc.com/amp/2021/06/03/china-sets-yuan-rmb-weaker-vs-us-dollar-for-first-time-in-a-week.html

US labeled it a currency manipulator because US wants the yuan to rise because a rise in yuan is the only thing that can bring back outsourced jobs in China back to US. And slow chinas economic growth as other 3rd world countries start to look competitive

You get the rise of Yuan and Inflation at the same time in USA.

Only way to avoid inflation is to produce these goods in USA at a lower price level than China. Not going to happen.

 

[Mk-313]

You get the rise of Yuan and Inflation at the same time in USA. This is same side of coin. While China can indeed consume more, but China made most product for the world. She can consume her own goodies

No it’s not it’s a correlation but not causation. If you read the article it points out things

Rise of yuan is mostly attributed to corona virus and and foreign investment shifting from US to China. That increased inflow of foreign investment makes yuan

2- China increased its bond yield to 3.07% vs 1.67% for US. Which also shifted a lot of money to buying Chinese bonds

3- Lastly, US printed $2 trillion dollars recently and if the printing amount exceeded the current floating gdp inflation will occur. So in the near term either US has to make up the gdp by increased productivity, infrastructure or just simply making taxes higher

 

[Song Hong]

No it’s not it’s a correlation but not causation. If you read the article it points out things

Rise of yuan is mostly attributed to corona virus and and foreign investment shifting from US to China. That increased inflow of foreign investment makes yuan

2- China increased its bond yield to 3.07% vs 1.67% for US. Which also shifted a lot of money to buying Chinese bonds

3- Lastly, US printed $2 trillion dollars recently and if the printing amount exceeded the current floating gdp inflation will occur. So in the near term either US has to make up the gdp by increased productivity, infrastructure or just simply making taxes higher

Cant be bothered to refute you.

But in contrary what is so-villified "Yuan manipulation" about? It is about China joining the USA hegemony system becoming a vassal state, by buying large amount of US bonds, in essence, allowing US to print monies out of thin air. This is what USA wants Saudi to do as well.

Instead of Petrodollar, the world become petro+ChinaProduction-dollar.

While Saudi become USA vassal state and USA keep quiet about Saudi currency manipulation, USA keep cursing China, even though this is exactly what USA want China to do.

 

[Mk-313]

Cant be bothered to refute you.

But in contrary what is so-villified "Yuan manipulation" about? It is about China joining the USA hegemony system becoming a vassal state, by buying large amount of US bonds, in essence, allowing US to print monies out of thin air. This is what USA wants Saudi to do as well.

Instead of Petrodollar, the world become petro+ChinaProduction-dollar.

While Saudi become USA vassal state and USA keep quiet about Saudi currency manipulation, USA keep cursing China, even though this is exactly what USA want China to do.

It’s called a debt loop. China exports more than it imports from US which cause yuan to rise. China then use the surplus money to buy US treasuries. Which balances out the surplus export by brining money back into the US. So yuan as a result does not rise

US is pissed about this because it is an open market economy US can’t dictate it’s business to stop shifting jobs to China. So it blames China to cause these job losses

Lastly every country prints out of thin airs. The increase in Chinese bond was also just printing money out of thin air. Some measure of printing money is tied to a country’s gdp but a large part is also tied to the demand of the currency as well

Since the entire world uses dollars not just the US . US has extra capacity to print

 

[ZeEa5KPul]

Aw, that's just too funny. Hey, if the US wants some price relief, it can stop shooting itself in the foot and drop its tariffs (with no expectation of reciprocity).

No? Okay, it isn't my wallet being drained.

 

[Song Hong]

It’s called a debt loop. China exports more than it imports from US which cause yuan to rise. China then use the surplus money to buy US treasuries. Which balances out the surplus export by brining money back into the US. So yuan as a result does not rise

US is pissed about this because it is an open market economy US can’t dictate it’s business to stop shifting jobs to China. So it blames China to cause these job losses

Lastly every country prints out of thin airs. The increase in Chinese bond was also just printing money out of thin air. Some measure of printing money is tied to a country’s gdp but a large part is also tied to the demand of the currency as well

Since the entire world uses dollars not just the US . US has extra capacity to print

The USA elites choose to trade low CPI for people and high financial profit for themselves, in exchange for job being transfer to China.

In a nutshell.

Now they are panic.

 

[Han-Tang]

the source of US inflation is the US itself, it prints too much dollars.
China is the victim, not the source.

 

[kankan326]

that’s not how it works. It hurts China more to let the yuan rise and make exports more expensive for the entire world. That’s why CCP is trying as hard as it can to devalue it again by increasing bank reserve to descrease dollars liquidity

www.scmp.com/economy/china-economy/article/3135919/chinas-yuan-slips-against-us-dollar-after-beijing-taps

www.cnbc.com/amp/2021/06/03/china-sets-yuan-rmb-weaker-vs-us-dollar-for-first-time-in-a-week.html

US labeled it a currency manipulator because US wants the yuan to rise because a rise in yuan is the only thing that can bring back outsourced jobs in China back to US. And slow chinas economic growth as other 3rd world countries start to look competitive

A simple question for you. If Yuan appreciates 30%, US or other countries manufacturers still can not compete with Chinese. Will US be the only loser here?

 

[Mk-313]

A simple question for you. If Yuan appreciates 30%, US or other countries manufacturers still can not compete with Chinese. Will US be the only loser here?

there are 3 parts to this

If yuan appreciates by 30% then other 3rd world countries will become more competitive for the same exports and exports will shift out of China.

2- If yuan goes up against the USD then chinas export becomes expensive for the entire world not just US since international transactions are settled in USD. Now that little increase wouldn’t make much difference to a worker in US. but other countries who’s labor difference isn’t that much with China will start to shift to domestic industries

I’ll give u an example I did for my case study. The cost to make products out of silver (silver spot price + labor) is on average is $1.20/gram in China and $1.42/gram in India . Just on that 20 cent difference China has captured biggest share of the metal molding industry


3-if the appreciation causes smaller difference between a US made and a Chinese made product. US will have a cause to put anti-dumping policy on that certain product. Basically US will put tariff on that product so that the price is equal to the US made product


Because manufacturing has very little margins so very little percentages can upset the balance.

If a 30% rise in yuan wasn’t going to put a dent in exports for China then their government wouldn’t be actively trying to ensure yuan stays devalued

 

[redtom]

Aw, that's just too funny. Hey, if the US wants some price relief, it can stop shooting itself in the foot and drop its tariffs (with no expectation of reciprocity).

No? Okay, it isn't my wallet being drained.

That gives Chinese companies room to raise prices. When the US is full of gunpowder, all China has to do is throw torches.

 

[FairAndUnbiased]

there are 3 parts to this

If yuan appreciates by 30% then other 3rd world countries will become more competitive for the same exports and exports will shift out of China.

2- If yuan goes up against the USD then chinas export becomes expensive for the entire world not just US since international transactions are settled in USD. Now that little increase wouldn’t make much difference to a worker in US. but other countries who’s labor difference isn’t that much with China will start to shift to domestic industries

I’ll give u an example I did for my case study. The cost to make products out of silver (silver spot price + labor) is on average is $1.20/gram in China and $1.42/gram in India . Just on that 20 cent difference China has captured biggest share of the metal molding industry


3-if the appreciation causes smaller difference between a US made and a Chinese made product. US will have a cause to put anti-dumping policy on that certain product. Basically US will put tariff on that product so that the price is equal to the US made product


Because manufacturing has very little margins so very little percentages can upset the balance.

If a 30% rise in yuan wasn’t going to put a dent in exports for China then their government wouldn’t be actively trying to ensure yuan stays devalued

1. Is totally false. Third world countries can't produce the manufactured products China can. China exports hundreds of billions worth of raw ICs, solar panels, LEDs, displays and circuit boards that have significant IP content and barriers to entry. It isn't like raw coal from Australia or US farm products that's literally from the ground.

That's why Americans have mostly been just eating the tariff costs with no decline in Chinese exports.

 

[Mk-313]

1. Is totally false. Third world countries can't produce the manufactured products China can. China exports hundreds of billions worth of raw ICs, solar panels, LEDs, displays and circuit boards that have significant IP content and barriers to entry. It isn't like raw coal from Australia or US farm products that's literally from the ground.

That's why Americans have mostly been just eating the tariff costs with no decline in Chinese exports.

They can 100%. But they can’t do because of a domestic company to rise up it must make the same product at a lower or a competitive to take market share. If business plan doesn’t show a profit they won’t do it

Solar panels, LEDs etc are all made in US too but at a very small scale. Because some segments of the US market only wants made in US products

And just like US companies poured billions in early 2000s to help China build those industries they can do the same with other countries if they can make the same product, at the pace China can make. Currently is not the case because of cheaper labor, already developed infrastructure no country can pump out products at the pace, efficiency and cheap as China can

 

[Song Hong]

I guess Biden will be begging Xi, come and manipulate CNY/USD. We will welcome you back as slave so that we print money out of thin air.