China and the USA engaged in a battle for economic primacy

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China and the USA engaged in a battle for economic primacy

Postby Fixed Cross » Thu Aug 17, 2017 4:33 pm

ft wrote: Steve Bannon, the brains behind Donald Trump’s nationalist economic agenda, added to tensions roiling the White House by pouring scorn on his colleagues, rubbishing US policy on North Korea and pressing for the administration to be “maniacally focused” on “economic war with China”.

In an impromptu and wide-ranging interview with The American Prospect, a left-leaning US magazine, Mr Trump’s chief strategist said he was engaged in a “fight every day” with Gary Cohn, the president’s chief economic adviser, and “Goldman Sachs lobbyists”.

Mr Bannon said US defence and security officials were “wetting themselves” as they urged a softer line on China in order to secure its help in curbing Pyongyang’s nuclear missile programme. North Korea was a “sideshow” in the context of a winner-takes-all competition between the world’s two largest economies.

“There’s no military solution [to North Korea’s nuclear threats], forget it,” he said. “Until somebody solves the part of the equation that shows me that 10m people in Seoul don’t die in the first 30 minutes from conventional weapons . . . they got us.”

Mr Bannon claimed he was working to place anti-China hawks in key positions at the defence and state departments.

The economic war with China is everything and we have to be maniacally focused on that

“We’re at economic war with China,” Mr Bannon said. “One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path.

“The economic war with China is everything and we have to be maniacally focused on that,” said the presidential adviser. “If we continue to lose it, we’re five years away, I think, 10 years at the most, of hitting an inflection point from which we’ll never be able to recover.”

Mr Bannon, a leading figure in the so-called alt-right movement before joining Mr Trump’s campaign, has been embroiled in a power struggle with HR McMaster, the president’s national security adviser, and with Mr Cohn.

Mr Bannon has been blamed by more centrist White House officials for a stream of leaks against his foes within the administration. That charge is likely to be renewed — Mr Bannon has since claimed he had spoken to the magazine off the record.

He had become increasingly isolated before the furore over the violence between white supremacists and anti-Nazi protesters in Virginia last weekend. The pressure on him has only increased following the aftermath to Mr Trump’s equivocal response to the clashes.

On Tuesday, the president stood up for his adviser, saying “he is not a racist”, while adding “but we’ll see what happens with Mr Bannon”.

Robert Kuttner, co-editor of The American Prospect, said Mr Bannon had phoned him on Tuesday, the same day that Mr Trump returned to his initial assessment that “both sides” had been to blame for the clashes in Charlottesville.

During the call to Mr Kuttner, Mr Bannon dismissed the neo-Nazi movement in the US as a clownish “fringe element”. He added: “I think the media plays it up too much and we gotta help crush it. These guys are a collection of clowns.”

His comments will confirm Beijing’s worst fears about him. Since Mr Trump assumed office, Chinese officials have lobbied more moderate administration figures — including Jared Kushner, the president’s son-in-law, and Ivanka Trump, his daughter — in an attempt to ease bilateral tensions.

So far, the strategy has worked. Mr Trump has backed off from threats to abandon Washington’s longstanding “One China” policy, to declare China a “currency manipulator” and to launch punitive trade actions against the world’s second-largest economy, especially if Beijing did not pressure North Korea to abandon its nuclear and missile development programmes.

On Monday Mr Trump announced that he would study allegedly unfair Chinese trade and investment practices in a probe that could take a year to conclude.

“We’re going to run the tables [on China],” Mr Bannon said. “We’ve come to the conclusion that they’re [engaged] in an economic war and they’re crushing us.”

China’s foreign ministry responded by saying that the China-US economic relationship was “mutually beneficial” and there could be “no winner from a trade war”. It added: “We hope that people will not use 19th- and 20th-century perspectives and measures to address 21st-century problems.”

What is Bannon talking about here. What inflection point.
This is a technical analysis that he made, but he doesn't give us the data.

I would like to find out what the bottom line is for the US economy to be able to stay on top.
So basically, what can definitely not be happening.
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Re: China and the USA engaged in a battle for economic prima

Postby Fixed Cross » Thu Aug 17, 2017 4:44 pm

What Is the Current Deficit?
The U.S. federal budget deficit for fiscal year 2018 is $440 billion. FY 2018 covers October 1, 2017 through September 30, 2018. The deficit occurs because the U.S. government spending of $4.094 trillion is higher than its revenue of $3.654 trillion. (Source: "2018 Budget. Table 2," Office of Management and Budget, March 16, 2017. “Mid-Session Review Fiscal Year 2017. Table S-5,” OMB, July 15, 2016.)

Four Reasons for the Budget Deficits
Most people blame the deficits on the 2008 financial crisis. But that's only half the story. These enormous deficits were the result of four factors. Only the last two are related to the recession.

First, the attacks on 9/11 led to the War on Terror. That almost doubled annual military spending. It rose from $437.4 billion in 2003 to a peak of $855.1 billion in 2011. For more, see Military Budget.

Second, mandatory spending has increased. That means benefit payouts for Social Security, Medicare and other mandated programs. It's exceeded $2 trillion a year since FY 2011. These payments consume most of the revenue each year. Only an Act of Congress that amends a program's benefits can change them. That would require a majority vote in both houses and is unlikely to happen. Any reduction in benefits takes money out of the pockets of current beneficiaries. This powerful demographic of seniors would vote lawmakers out of office.

Third, the $787 billion economic stimulus package added to the 2009 deficit. That's because it cut taxes and extended unemployment benefits. It also funded public works projects to create jobs. But this expansionary fiscal policy was needed to push the economy out of recession. In fact, it did so in the second quarter of 2009.


Fourth, the recession reduced federal revenue and taxes. As the economy tanked, so did tax revenues. Government income fell from its pre-recession record of $2.57 trillion in FY 2007 to $2.1 trillion in FY 2009. It didn't recover until FY 2013 when it reached $2.78 trillion.

Why Does the Government Always Overspend?
The difference between the U.S. government and you is that the president and Congress overspend on purpose. That's for three reasons:

The more the government spends, the more it stimulates the economy. That's because government spending is itself a component of gross domestic product.
There are many other countries willing to lend us the money, like China.
Politicians get elected for creating jobs and growing the economy. They lose elections for raising taxes and unemployment.
When You Should Be Concerned
A budget deficit is not an immediate crisis. In moderation, it increases economic growth. It puts money in the pockets of businesses and families. Their spending creates a stronger economy. That makes other countries happy to lend to the U.S. government. It has always paid the debt back.

It's only when the debt-to-GDP ratio approaches or exceeds 100 percent that owners of the debt become concerned.


That's because they might wonder whether the United States will make good on its debt. Lenders grew worried in 2011 and 2013. That's when tea party Republican congressmen threatened to default on the U.S. debt.

The Deficit Is Being Reduced
The government reduced the deficit for the FY 2017 budget. But it has no intention of eliminating it. The OMB forecasts that the deficit will become a surplus by FY 2027. Any deficit reduction necessitates painful and hotly disputed spending cuts or tax hikes. That would be the first time the budget was balanced since President Clinton's administration. For more, see Current Federal Budget Breakdown.
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I've been guided somewhat by William Blake's quote: "I must create a system or be enslaved by another mans; I will not reason and compare: my business is to create". Just change 'system' for 'style'. - Bill

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Re: China and the USA engaged in a battle for economic prima

Postby Fixed Cross » Thu Aug 17, 2017 5:32 pm

The market capitalization of the Shanghai-Hong Kong market is 31,718 billion yuan at this point, which would translate to about $ 2 Trillion but Im seeing numbers listed all over the place ranging up to 5 trillion - one noodle hit even says 10 trillion.
Is this deliberate?

The NYSE market cap is over 20 trillion USD.



edit - thats awesome
My spellchecker corrected my attempt to write google into noodle.

Thats what Im gonna call it now.
Lemme noodle these numbers.
Thunderbolt steers all things.

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I've been guided somewhat by William Blake's quote: "I must create a system or be enslaved by another mans; I will not reason and compare: my business is to create". Just change 'system' for 'style'. - Bill

The strong do what they can, the weak accept what they must.
- Thucydides
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Re: China and the USA engaged in a battle for economic prima

Postby Fixed Cross » Sat Aug 19, 2017 5:56 pm

ft wrote: In charts: The rise and rise of China’s tech trinity

Profits of Alibaba, Tencent and Baidu keep surging but they are vulnerable

China’s tech titans have blown earnings forecasts out of the water in the latest quarter, propelling their shares higher.

Baidu, Alibaba and Tencent, collectively known as BAT — along with ecommerce group JD.com, microblogging-turned-livestreaming platform Weibo, and online gaming group NetEase — are riding a wave of Chinese online consumption: shopping, gaming and watching videos on their phones. Here are five charts putting the numbers into context.

Image

Last quarter Tencent and Alibaba elbowed their way into the world’s 10 biggest companies by market capitalisation. With shares still on a tear, each up more than 70 per cent in the year to date, the two now rank seven and eight. Of course, being in the upper echelons means playing with the really big boys: even combined, Alibaba and Tencent are worth less than Apple.

And watch those coming up on their heels. Shares in JD.com are also up more than 70 per cent in the year to date and are now worth $62bn. Baidu, an early star of China’s tech trinity, has stumbled on the back of scandals at its core search engine and a failure to spot the shift to mobile. But investors appear to like its ambitions in artificial intelligence and have pushed its value to $78bn. Shares are surging sharply ahead of earnings, and valuations are heady.

Profits with Chinese characteristics

Image

Costs are rising. The battle for content is inflating prices; competition for users has unleashed a bounty of subsidies and expensive areas of investment, such as AI, are a long way from making money. For some, operating margins are slipping and several business units are bleeding cash.

The likes of Alibaba and Tencent shrug this off. Payments, says Tencent president Martin Lau, is about supporting the ecosystem and other businesses. “It’s not the target to make a profit.” For Joe Tsai, vice-chairman of Alibaba, “shareholder value will follow when we create value for our customers”. “Reinvesting” in Chinese tech speak often translates into subsidies, or buying market share.

Advertising, what advertising?

Image

Ad revenues drive earnings for most of the tech world, but not in China. Tencent, with 963m monthly active users (MAU) on its Weixin and WeChat accounts, is approaching half Facebook’s 2bn users. But its digital ad revenues this year are forecast to clock in at under $7bn, compared to the US social media group’s $36bn-plus, according to eMarketer.

This can be viewed in two ways: a missed opportunity or plenty of scope to grow. Forecasts see the levels rising, but slowly. That chimes with the prognosis for Tencent from Mr Lau: he wants to improve the quality rather than quantity of ads and is thus “erring on the very conservative side in terms of releasing our [ad] inventories . . . Right now we see no urgency to put a lot of inventories out.”

Evolving to stay in the game

Image

Sina Weibo was a minnow compared with Twitter when it burst on to the stock market in April 2014, raising a paltry $285m, and lossmaking to boot. Fast forward three and a bit years and it has its US peer in the shade. It has done so by staying in step with its — mostly young — subscribers, moving into livestreaming and making its platform mandatory for key opinion leaders, celebrities and other trend setters to woo and entertain their legions of fans.

Weibo may have started out like Twitter but it has morphed into an amalgam of Twitter, YouTube and Facebook. As importantly, it has made its additions work: another difference with the US microbloggng site that killed off its short video Vine mobile app.

They are vulnerable

Image

The days of assuming Beijing’s policy is “domestic company good, foreign company bad” are long over when it comes to tech players in China. Sure, the locals are not blocked at home — unlike Google’s search function or Facebook. But as China’s Great Firewall tightens, so too local players are being caught up in the backlash, spooking investors.

Tencent bears the scars. On July 4 it shed $15.1bn in market value after it started limiting the time children spend on its top-selling Honour of Kings game after authorities criticised the game’s ”addictive” nature. Tencent duly described its new rules in a post on Tencent’s official social media account as the “most serious anti-addiction measures in history”.

Last week it was more broadly rounded upon, along with Baidu and Sina Weibo, for spreading material that “harms the social order”. Next came the turn of Alibaba, thanks to now-banned VPN tokens being sold on its Taobao shopping platform. Livestreaming and gossip sites also come under the clampdown.

Beyond content, Beijing appears to be waking up to the private companies’ massive reach and taking steps to bring the lumbering state-owned enterprises back into the picture. Earlier this month the central bank ordered online payments groups to operate through a centralised clearing house, forcing Tencent and Alibaba’s payments units to share valuable transaction data with competitors.

And the BAT were all corralled into stumping up cash for telecoms SOE China Unicom — a sort of national service, or tax, to at least slightly redistribute the spoils.

Additional reporting by Alice Woodhouse
Thunderbolt steers all things.

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I've been guided somewhat by William Blake's quote: "I must create a system or be enslaved by another mans; I will not reason and compare: my business is to create". Just change 'system' for 'style'. - Bill

The strong do what they can, the weak accept what they must.
- Thucydides
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Re: China and the USA engaged in a battle for economic prima

Postby Fixed Cross » Sat Aug 19, 2017 6:00 pm

The largest five US market capitalizations are all tech companies.
Next finance, next drugs, next oil. No solid industry.

Compare this to the 100 largest companies in 1960:

Rank Company Revenues ($ million) Profits ($ millions)

1 General Motors 11,233.1 873.1
2 Exxon Mobil 7,910.7 629.8
3 Ford Motor 5,356.9 451.4
4 General Electric 4,349.5 280.2
5 U.S. Steel 3,643.0 254.6
6 Mobil 3,092.9 164.0
7 Gulf Oil 2,713.0 290.5
8 Texaco 2,678.0 354.3
9 Chrysler 2,643.0 -5.4
10 Esmark 2,475.5 19.1
11 AT&T Technologies 2,314.9 102.2
12 DuPont 2,114.3 418.7
13 Bethlehem Steel 2,055.7 117.2
14 Amoco 1,956.8 139.6
15 CBS 1,910.7 85.9
16 Armour 1,869.8 14.1
17 General Dynamics 1,811.9 31.1
18 Shell Oil 1,810.0 147.4
19 Boeing 1,612.2 12.4
20 Kraft 1,605.7 49.4
21 Goodyear Tire & Rubber 1,579.3 76.0
22 ChevronTexaco 1,564.8 253.6
23 Union Carbide 1,531.3 171.6
24 RCA 1,388.4 40.1
25 Procter & Gamble 1,368.5 81.7
26 Navistar International 1,363.2 76.4
27 Intl. Business Machines 1,309.8 145.6
28 Lockheed Martin 1,301.6 8.7
29 Sinclair Oil 1,232.2 45.5
30 Firestone Tire & Rubber 1,187.8 64.6
31 ConocoPhillips 1,163.0 104.6
32 Continental Group 1,146.5 40.0
33 American Can 1,107.4 40.9
34 General Telephone & Electronics 1,081.1 72.3
35 United Technologies 1,081.0 28.6
36 Republic Steel 1,076.8 53.9
37 General Foods 1,053.0 54.1
38 Rockwell Automation 1,044.9 30.7
39 International Paper 1,030.2 83.6
40 ARMCO 1,022.4 77.1
41 Citgo Petroleum 994.9 42.4
42 Sperry 989.6 27.6
43 Uniroyal 976.8 35.6
44 Borden Chemical 941.3 25.5
45 Eastman Kodak 914.1 124.7
46 Douglas Aircraft 883.9 -33.8
47 American Motors 869.9 60.3
48 Alcoa 858.5 55.6
49 Burlington Industries Equity 805.5 27.6
50 Goodrich 771.6 37.6
51 Jones & Laughlin Steel 765.7 29.5
52 ITT Industries 765.6 29.0
53 Caterpillar 742.3 46.5
54 National Intergroup 737.0 54.9
55 Sunoco 735.7 42.8
56 Nabisco Group Holdings 723.7 90.4
57 Honeywell Intl. 719.7 50.0
58 Dow Chemical 705.4 62.9
59 Ryerson Tull 705.1 48.4
60 Olin 702.0 37.4
61 Conoco 685.8 60.3
62 Bendix 683.8 27.4
63 Fortune Brands 681.2 63.2
64 GenCorp 676.9 26.6
65 Bestfoods 671.3 33.2
66 AMAX 668.5 30.8
67 Wilson 655.5 9.6
68 BorgWarner 649.9 39.3
69 Anaconda 632.7 59.2
70 Monsanto 615.4 49.0
71 Youngstown Sheet & Tube 608.1 31.0
72 PPG Industries 606.9 44.1
73 American Cyanamid 583.6 52.3
74 Colgate-Palmolive 582.0 25.3
75 Tidewater Oil 559.4 33.9
76 Owens-Illinois 552.7 40.8
77 General Mills 546.0 16.8
78 Deere 542.5 48.5
79 Atlantic Richfield 541.3 30.2
80 Allis-Chalmers 539.6 22.9
81 Ralston Purina 530.6 17.8
82 NL Industries 530.6 52.5
83 Crown Zellerbach 527.3 42.3
84 Martin Marietta 523.7 11.9
85 American Standard 517.4 21.4
86 3M 500.7 63.6
87 Pure Oil 499.6 28.9
88 Campbell Soup 496.5 34.5
89 Singer 496.1 21.3
90 Raytheon 494.3 13.5
91 Reynolds Metals 489.3 44.8
92 St. Regis 474.4 28.6
93 Sealed Air 469.7 14.8
94 J.P. Stevens 459.4 18.7
95 Weyerhaeuser 458.3 60.4
96 Sunray DX Oil 451.0 43.8
97 Foremost Dairies 440.1 10.5
98 Kennecott 437.2 57.3
99 Morrell (John) 436.3 6.1
100 McDonnell Douglas 435.9 10.0
Thunderbolt steers all things.

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I've been guided somewhat by William Blake's quote: "I must create a system or be enslaved by another mans; I will not reason and compare: my business is to create". Just change 'system' for 'style'. - Bill

The strong do what they can, the weak accept what they must.
- Thucydides
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Re: China and the USA engaged in a battle for economic prima

Postby Urwrongx1000 » Sat Aug 19, 2017 6:06 pm

While US is busy debating whether Steve Bannon is a "racist" or not....he's absolutely right about China.
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Re: China and the USA engaged in a battle for economic prima

Postby Fixed Cross » Sun Aug 20, 2017 7:23 pm

Yes.
Confusion reigns.
On one page:

"Bannons ouster lifts the Dow Jones off Lows"
"Wall Street ends down after hits House shakeup"

Of course the main product the the West has to offer over China, is freedom of expression. This is the ground material to the four largest US corporations; Google, Apple, Microsoft and Facebook - then Korea has Samsung. We would need to back this up with some radical geocentric technology. I mean technology that makes direct use of our power in order to restore the Earth to glories not seen in perhaps millions of years - we could surely develop methods to rapidly grow forests and purify oceans, if we put the money into it - at the very least we could enhance our experience of life by massively focussing on such aims.
Thunderbolt steers all things.

Image

I've been guided somewhat by William Blake's quote: "I must create a system or be enslaved by another mans; I will not reason and compare: my business is to create". Just change 'system' for 'style'. - Bill

The strong do what they can, the weak accept what they must.
- Thucydides
User avatar
Fixed Cross
Doric Usurper
 
Posts: 6866
Joined: Fri Jul 15, 2011 12:53 am
Location: Thrudheim


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