What would happen if US, EU, Japan, S.Korea completely cut business with China?

[kankan326]

I am only talking about the potential implications of western software bans.
No one in the majority world is going to buy a phone without google services.

I never said Huawei is only a phone company, if it was it wouldn't be running today.

As I said, phone is a very special product. It doesn't match 99% other business. Let alone phone is old story now. EV is the future super star for now

 

[Beast]

100% decoupling is not possible. Especially for EU. Every country has its own independent China policy. Supposing this extreme scenario happens, what the world would be like?

My conclusion is: Both China and the west are the victims. But China will be the winner.

For China, Of course there would be short term economic chaos. But I believe Chinese living standard will resume to the level of today in 5 years. In 2021, China’s trade surplus with US is 676 billion USD. With EU the trade surplus is 250 billion USD. China has trade deficit with Japan and S.Korea. Overall China will lose 900 billion USD trade surplus. It won’t hurt China too much in the long run. 1)SE Asian countries, India, Latin American countries, African countries will benefit from the new cold war. And they will have bigger purchasing power for Chinese goods. 2)China’s FX reserve benefit Americans more than Chinese. China used most of its FX reserve to buy US debts. Which improves Americans welfare, instead of Chinese. Just like Chinese economist Wen Tiejun said: “China is like a cow. US stripped its cowhide twice. First by using USD to import cheap goods from China. Second by selling US debts. Most US dollars will come back to US for free .”

For the west, the consequences of cold war 2.0 will be much more serious than arrogant westerners expected. China is not Soviet Union. Who was an armed natural resources exporter. Decoupling with China will hit west’s economy very hard.

From demand aspect to say. Westerners are optimistic because they are the low end and middle end products buyers and they believe China is replaceable. Fact is China is not replaceable. Building an intact no-China supply chain outside China needs huge amount of money. The west doesn’t have that money. Even if the new supply chain, at all odds, is successful built. It can not compete with China’s because only China can make best cost performance. People in the west have to pay more money for lower quality goods. This supply chain will specially serve for the western countries. Other non-west countries will still buy goods produced by China-in supply chain.

From supply aspect to say. The west firstly will lose China market. Which is 25% S.Korea total export, 50% Germany car export, 20% Apple sale. The number would be bigger if take the indirect export to China and investment income from China into account. Secondly, China will have to build its own high end goods industries. Once breakthroughs are made, China will sell them to other non-west countries. Western countries will become poorer for losing business to China in world market. Don’t doubt China has the ability to produce high end goods. It’s already happening in many fields. Semiconductor will be next.

The west will lose big part of money printing privilege. US dollar and Euro will definitely not be used in the China-in supply chain. Countries in this supply chain will not play west’s cow role anymore. Non-west countries will be richer. West will be poorer.

There are two reasons that guarantee China will win cold war 2.0.

1)China has an intelligent, hardworking, disciplined, creative work force. Which the west combined can not compete with in quantity, and in quality in the long run.

2)Average income of Chinese labors is much lower than west’s. Don’t misunderstand me. I’m not going to talk about low cost stuff. After full competition between the two camps, the income levels of the two sides will tend to reflect their real quality. Which means Chinese income will grow while westerners’ salary will drop, sharply. Which side will fall first then?

Why are you so worried about permanent? If the west and japan can do it. They would do it long ago...

 

[beijingwalker]

I say it again, The most likely scenario would be that some other countries just jump on the chance and buy up Chinese products and resell them to the western countries at a premium and make tons of easy, effortless money.

China wins, other non western countries win, the west and it's lackeys lose.

 

[VCheng]

wrong.
America rose from devastating civil war and became world's most powerful nation in the history of mankind.
@VCheng

To be sure, many other nations have risen from utter devastation to rise to great heights (Japan after WW2 is a great example). It remains up to the people to take control of their futures by working hard to make it what they want it to be, and no nation has a monopoly on that simple formula, never in the past, not now, and never in the future.

The main difference between modern day China, rising as it is, and USA, great as it is, remains the closed xenophobic culture of China, and the open and welcoming-to-all culture of USA. Thus, China can never hope to be a leader of the free world with its communist overlords in power. It is as simple as that.

Oh, and those who can be misled by the drivel posted endlessly here by the commiebots are perhaps not worth salvaging anyway. Let them make this mistake, and find out when the time comes what USA is and what it can do whatever it sets it mind to achieve.

 

[kankan326]

To be sure, many other nations have risen from utter devastation to rise to great heights (Japan after WW2 is a great example). It remains up to the people to take control of their futures by working hard to make it what they want it to be, and no nation has a monopoly on that simple formula, never in the past, not now, and never in the future.

The main difference between modern day China, rising as it is, and USA, great as it is, remains the closed xenophobic culture of China, and the open and welcoming-to-all culture of USA. Thus, China can never hope to be a leader of the free world with its communist overlords in power. It is as simple as that.

Oh, and those who can be misled by the drivel posted endlessly here by the commiebots are perhaps not worth salvaging anyway. Let them make this mistake, and find out when the time comes what USA is and what it can do whatever it sets it mind to achieve.

Both Japan and S.Korea have xenophobic culture. China is like a continent that consists of 10 Japans. Go check the proportion of Asian students in famous US colleges.

 

[beijingwalker]

Oh, and those who can be misled by the drivel posted endlessly here by the commiebots are perhaps not worth salvaging anyway. Let them make this mistake, and find out when the time comes what USA is and what it can do whatever it sets it mind to achieve.

US should really set its mind on gun violence, drug overdosing, homelessness, high crime rate... by the way, their infrastructure also needs a liftup.

 

[Viet]

The ultimate question is: Can China produce high end goods to end west's dominance? If yes China wins.

High end products? then China should make Rolex, should not be difficult. Whether or not anybody buys a Chinese version of Rolex is another question.

 

[kankan326]

High end products? then China should make Rolex, should not be difficult. Whether or not anybody buys a Chinese version of Rolex is another question.

Chinese watch brand won world watch design Oscar

 

[jhungary]

High end products? then China should make Rolex, should not be difficult. Whether or not anybody buys a Chinese version of Rolex is another question.

A lot of people buy Chinese "version" of Rolex, that's called "Rip Off"

 

[beijingwalker]

High end products? then China should make Rolex, should not be difficult. Whether or not anybody buys a Chinese version of Rolex is another question.

High end products don't always mean luxury items, how many people need a Rolex? How many people need a wrist watch at all nowadays?

 

[Viet]

High end products don't always mean luxury items, how many people need a Rolex? How many people need a wrist watch at all nowadays?

Yes that’s why the term high end. Mercedes is high end, Lada is low end. Rolex is high end, other are low end. Ask Chinese girls, they want French bags, because they want high end.

 

[jhungary]

High end products don't always mean luxury items, how many people need a Rolex? How many people need a wrist watch at all nowadays?

Apprently a lot, I mean how many people wear Fitbits, Apple Watches, Samsung Watches these day?? Even Chinese mobile maker tried to make them to I would say little to no success outside China.

 

[大汉奸柳传志]

it will push China into territory expansion mode like Russia.

 

[Mista]

A complete decoupling is not realistic. Not even Russia can be completely decoupled. The more likely scenario is lower future potential growth on both sides.

1) The first lesson in economics is opportunity cost. It's not that the Western camp lack the technology to manufacture consumer goods, it's just that to do so they have to forgo higher value-added economic activities because no factor of production (namely supply of cheap labor for consumer goods) is unlimited. If you want to be competitive in mass manufacturing, it means a greater share of your population will have to do low economic value-added jobs, resulting in lower wages. Or accept more expensive consumer goods. Either way, purchasing power drops.

2) Efforts for self-reliance and diversification are inflationary. You are no longer buying all the best products available for the lowest price, neither you are selling all your crappiest products on hand for the highest price. If you make the deliberate decision to go for diversification and go against economic rationale, it means you are trading efficiency for resilience. It's like buying insurance. You are buying insurance for that tail event so that you won't be caught completely off-guard should it happen, but there is a cost to pay on an ongoing basis. You have to pay more insurance premiums for greater resiliency.

 

[VCheng]

Even funnier for a pathetic white wannabe to say what China should or should not do, if it weren't so stupid.

Please stop lying, if you can help it. Can you point to any post that I have made that tells China what or what not to do?