China's economic growth simply isn't sustainable, and that's even if it was true growth. There isn't a top economist alive who believes China's self-reported GDP numbers aren't fudged in one way or another (source: http://www.businessinsider.com/economist-reactions-to-chinas...). Either one of those situations (an economic slowdown, China fudging the numbers, or the more likely situation: a combination of both) makes hedging against the Yuan a pretty solid bet.
People and foolish investors think, "Well, China has more than a billion people so it will eventually have a robust and rich economy!" Only, it doesn't work like that (cue the "That's not how this works. That's not how any of this works" lady). Population size is only a tiny facet of a much larger picture. And it's not even a particularly important one, relatively speaking. There are some economists who are now starting to think that having a massive population size may have the opposite effect; it helps you reach a certain point but then your massive size begins to act as an anchor which keeps you from growing further.
It is not necessarily about the sustainability of the Chinese economy. No matter how much capital the hedge funds can muster it will be puny compared to PBoC resources. The real threat to the yuan is if regular Chinese become convinced of the trade.
Hedge funds bet against the yuan because right now it is one-sided: meaning they don't need to worry about short squeezes as typical shorters would have to. If yuan were to sharply rise it is pretty certain that PBoC would intervene. This makes the bet against the yuan relatively safe. The only way the PBoC can stop the shorts is to make borrowing cost high. But it is also trying to make the yuan more widely used so it is loathe to do that as well over any extended time.
> No matter how much capital the hedge funds can muster it will be puny compared to PBoC resources
This is incorrect. Hedge funds borrow and create temporary money by writing derivative contracts such as options, futures & swaps. It is by this logic they can actually muster more funds than the PBOC in aggregate. Quite simply the market for currencies is bigger than the PBOC and the hedge funds, but there are more hedge funds that are richer than the 3T in reserves the PBOC has access to.
This is partly why the PBOC uses the overnight rate to limit resources (such as to affect the interest rate of the derivatives instead of the Yuan prices they bear). It would be possible to profit by arbitraging the interest rate so this would make using derivatives expensive too.
Of course affecting interest rates affects the entire economy as a whole and is unsustainable.
No they wouldn't, no one would put their eggs in one basket in terms of risk.
Nonetheless the size of markets in control of hedge funds is still larger than what the PBOC has access to.
It may be better to substitute 'hedge funds' with anyone out there wanting to make profit through a price anomaly. This amount of people and their money is larger than the PBOC's resources.
Also it doesn't always take a sell to lower a price, or a buy to increase a price. It just takes a price that has the largest amount of trades as it does on Monday morning auctions with every currency.
> There is relative little rmb outside the country.
There doesn't need to be any, so long as the counter currency exists (the USD, EUR, JPY, etc) there can be a control against the onshore yuan, whether it trades or not.
There is always a counter party, It can be created using swaps to other currencies and to other companies actual cash flows.
I wouldn't want to argue against this topic excessively because its a fairly clear cut case of 'this time its different' with China, primarily through marketing.
I'd point out that on previous occasions in history, the gold & silver pegs, various cross currency pegs. It has always been the case the price setter has assumed they were bigger than the market and it has always turned out the opposite. It is also because the market can stand the test of time. This combined with today's use of leverage & derivatives is an even more dangerous combination.
Markets always assume the correct rate, because if not there is something that can be profited from.
None of what I say precipitates bias, I'm not against China's rise. I even believe the GDP numbers out of China, as I mention in another comment on this page. This is just the basis of how markets work. The predicate of your assumption is the PBOC is bigger than the market for Yuan trade and this is incorrect. In something as liquid as a currency a counter party will always be available.
If market is forced to trade at an artificial price often the result is illiquidity. Swap or not eventually someone has to be on the long side.
I didn't say PBoC is bigger than the market. I said it is bigger than the offshore market. I don't see how that is controversial. It can shut down the offshore market if it wants to.
> If market is forced to trade at an artificial price often the result is illiquidity
There is, Offshore-Onshore spread & HKD interbank rate.
> It can shut down the offshore market if it wants to.
Not forever, markets can do what they are without any limit. The PBOC loses money or hurts China's economy doing this and it cannot be sustained.
> Swap or not eventually someone has to be on the long side.
There is always a counter party as someone will need to buy something in China. Not every flow is speculative. It is a very large exporter economy, if not the largest.
A swap allows finding a counter party in a currency that is not the Yuan at the cost of the interest rate differential.
Finding a counter party is actually very easy, especially with exchange rate swaps. It does not require a Yuan counter party with physical RMB.
Instruments such as swaps, options and futures were actually created to provide liquidity in cases when it is withheld such as what is being done. This is what makes today even less different than previous times when it comes to exchange rate pegs.
If not a swap, its an option. An option can have a counter party as someone will always be willing to underwrite an option as it pays off a premium that has _no bias_ to the expected price direction of the underlying instrument.
Hedge funds know this because they have it all at their disposal. It is simply the cost of time that has to be paid (in terms of options premiums or the swap rates), if they are correct.
The PBOC realises this and this is why their options are limited to making the trade expensive as opposed to being able to control it. This is why they jacked up the HKD interbank rate and increased reserve requirements on the RMB. Again, it ought to be mentioned this hurts all HK and China businesses and is unsustainable in the longer run.
Our positions are not substantially far apart except regarding hedge funds power. You first expanded "hedge funds" to include everyone looking to make a buck; then you said counterparties are easy to find for all these money looking to short. I don't see how that can be logically consistent. If everyone intending to short finds a long to match at the current price, why would that bother the PBoC?
As I said I believe the hedge funds bets against the yuan are relatively safe. I believe this is the case because they are working for the PBoC, not against it. The PBoC apparently would not mind the yuan to weaken over time. It just doesn't want it too quickly or disorderly. It wants to give time to companies that borrowed in USD to bet on yuan appreciation to unwind but it does not want to freak out retail savers to jump on the same trade so it is a delicate position. One can debate if such a policy is wise but I don't think it is at all like the all powerful hedgies put a gun to the PBoC's head. Having the offshore yuan trade lower actually provides political cover for the PBoC in Washington. It is just that herding cats can be challenging.
>China's economic growth simply isn't sustainable, and that's even if it was true growth
People have been naysaying China for a while but it's kept merrily growing. Mostly it's because the Chinese tend culturally to be pro education and hard working but in China were reduced to very low incomes by Mao's communism and have since been recovering and getting back towards the kind of economy they have in Taiwan, Hong Kong, Singapore and the like.
GDP per capita in China is $6,800 (up from $951 in 2000) against $32k in Taiwan and $55k in Singapore so there's a way to go. A housing crash will probably just be a blip for a while. They'd have to turn back to Mao to really muck things up.
Ironically, these unemployed million of disgruntled workers will not move into the empty buildings in the city; They'll most likely move back to the countryside. They will, however, be back in the city for protesting.
It's bizarre that you're getting downvoted. The sole reason China's economy kept - supposedly - growing so quickly after the great recession was due to the extreme amount of debt they took on.
China took on the greatest pile of debt in world history in the shortest amount of time. Nothing like it has ever been seen before. They're now arguably the most indebted nation when you combine public + private debt, and it continues to expand. They have no way to reduce that debt, as the moment they take their foot off the debt gas their economy will crash, and yet their new debt is generating almost no growth return. They're bleeding reserves, they're overflowing with zombie corporations, their asset classes keep trying to implode and require constant large bailouts, and they still have nearly a billion poor people to deal with and half a billion pretend farmers without jobs. How could they be more of a disaster?
> People have been naysaying China for a while but it's kept merrily growing.
That's characteristic of both bubbles and genuine exceptional performance, and in many situations in addition to national economies. Look at rapidly growing startups, for example.
I think China has both bubbles and genuine exceptional performance. The property market there is pretty bubbly. And I don't know if you'd even call the stock market thing a bubble when it was deliberate government hyping.
I think Japan stopped growing rapidly partly because they'd caught up with the west and couldn't keep transforming by copying more developed countries. I don't think China's there yet. Maybe if their gdp/capita goes from $6.8k (China) to $39k (Japan) that will be the case but there's a way to go.
The problem is more that the rest of the world cannot absorb more chinese exports, which force the chinese to have to do consumption based growth. Changing direction of growth like that is not simple.
Not only is changing direction extremely difficult, service based growth is far slower compared to manufacturing based export growth when you're coming up from nothing as China did, starting from $300 GDP per capita in 1990. They were able to tap into virgin (to them) export markets in the US and Europe. As you noted, there are no more well-off consumers to provide for their export growth, that party ended in 2009 or so.
The problem here is China has seriously miscalculated and focused too heavily on exports. The rest of the world doesn't want more Chinese exports than they did in 2007. Export lead growth only gets you so far.
Japan [with a population of ~128 million] could run its economy into exports and scale to catching up with the West in that manner because of the smaller population.
China's exports have stopped growing and that is a very, very serious problem with debt fueled growth focused on exports. They'll have to print money [to bring export growth back and avoid a private debt bubble bursting] which is why everyone is betting against their currency. Or they'll go into a recession and they'll need to print money.
That said, plain old GDP also matters depending who you are. If your country's economy heavily relies on Chinese imports/exports (see my other comment), your government doesn't care much about the average Chinese citizen's living standards.
Which markets in the world, besides the US, have a stable enough economy for China to rely on their consumption?
Europe still has significant headwinds, Canada and the middle east...that's pretty obvious with $30/barrel oil prices, Russia of course not doing terribly great, capital flooding back to the US from Central and South America due to interest rates rising.
Keep in mind, a lot of manufacturing is moving back to the US from China with automation being cheeper than (quickly rising) Chinese labor rates [1] [2] [3].
If China cannot stoke internal demand quickly enough (and I assure you, it cannot), it's going to slide into a deep recession. On the bright side, this is going to help cool off London, Toronto, Vancouver, SF/LA, Miami, and central Texas property markets (where a lot of Chinese money was flowing into).
> On the bright side, this is going to help cool off London, Toronto, Vancouver, SF/LA, Miami, and central Texas property markets (where a lot of Chinese money was flowing into).
I really really really really really hope so but man... I don't know... the Mainlanders have waayy too much money and the existing owners of multiple properties won't let the properties go anyway so we may have a stagnant period (good) for a while until either China gets better or... well, I hope the market goes down a bit :D.
China has been conjuring demand for concrete buildings for 7 years. IMO "stoking internal demand" is harmful to the economy. There's always demand for what people really want. Clean air, comfortable, affordable, living spaces with readily access to transportation to quickly travel to where other people are, good food, etc.
But then again, China can't step back from the current structure of the economy without risking collapse, which would endanger the Party's power.
Xiaomi isn't doing very well these days. Their growth fell off a cliff last year, and is very unlikely to recover to the brief glory days. The smartphone market is going to grow extremely slow from here forward. Xiaomi will end up as just another irrelevant smartphone maker, in a heap of dozens of them like HTC or Motorola.
The Chinese are definitely focused on markets with new growing cellphone adoption rather then the US where it is hyper competitive. I don't believe their success here is an indicator of there overall wellbeing.
Any nation with a large rural population with access to easy credit has the potential for massive growth.
The majority of China's population still consists of subsistence farmers. China should be able to maintain rapid growth until those farmers are integrated into a modern industrialized economy at which point the returns on investment will start to diminish like it has for every other industrialized nation.
China can't integrate those farmers, there are no jobs for them. And that's before China has to lay off tens of millions of industrial workers they no longer need, and that's before robotics completely decimates low-value manufacturing.
Those subsistence farmers are kept that way because there's nothing else for them to do and there never will be. China can't allow the productivity of their farming to rise - it's among the lowest on earth - because of the social chaos that would occur. Unless you can find another three to four billion global consumers equal to your typical US or European consumer, such that China can then employ 450 million more people in jobs.
Printing tons of US Dollars to finance an enormous deficit in the balance of trade [1] seems way more unsustainable to me.
The only reason it has been holding up until now is actually the US Dollar reserves of China [2].
Reserves which fell by half a billion dollars last year, and still falling. This is why the funds are betting against the Yuan. How far is China willing to see it's reserves fall before it blinks?
Did you mean half a Trillion and not Billion? Because it seems to me that China has $1.5 trillion+ reserves, and half a billion drop would not be cause for surprise.
There isn't a top economist alive who believes China's self-reported GDP numbers aren't fudged in one way or another
Meta: Why is it SOP on HN to downvote/chastise those who claim US economic numbers are fabricated, or post zerohedge/shadowstats links, yet fully embrace the notion of the PRC is doing it? What makes the US so special in its sainthood?
> Why is it SOP on HN to downvote/chastise those who claim US economic numbers are fabricated, or post zerohedge/shadowstats links, yet fully embrace the notion of the PRC is doing it?
Because even if the U.S was doing it, it would be minor fudging. If China is doing it, it's almost wholly fabricated and un-reflective of reality. The U.S has plenty of independent verification of its numbers, and tons of channels for oversight. China literally has no oversight. Their government is the end-all, be-all. The alpha and omega. They don't have any oversight whatsoever. Their government runs the media (that's not an exaggeration, they literally own the news agencies) as well, so you don't get for-profit news organizations who would love nothing more than an economic controversy of that scale to come out so they could report on it and make loads of cash.
Basically, the entire premise is silly if you just use a little critical thinking.
Recently someone at Davos asked a PRC rep about this and he mentioned the number is close but is often different due to smoothening.
He did mention it is close and showed that tax revenues grew quite close to the GDP rate. This is something that does not typically happen when GDP decreases or is far off from the actual numbers.
There are many economic indicators that correlate to GDP growth, but are also influenced by other factors and so the strength of the correlation can be strong or weak at any given time. This means at any given moment you can probably pick or chose one or more other indicators to back up any particular contention about GDP, but that doesn't really prove anything. To get a good picture you need to look at a wide variety of indicators. If the vast majority of them indicate the GDP growth measure is wrong, then even if a few of them back it up it's still likely that the growth measure is being fiddled.
There are many but wouldn't you agree tax revenues are a rather hard indicator to fudge if GDP decreases? Tax revenues are very well correlated to GDP, in downturns too.
6% is also a rather large increase YoY for the Chinese MoF's tax receipts. It is difficult to make hard cash of such a large number up.
I think what has happened is China actually grew faster than the claimed 7-9% in the past decade and now the amount is smoothened to reflect this
I've always noticed a sway on HN to downplay China's growth, given the large American audience this is quite expected. But it is good to be impartial to understand the changes a bit better.
There are many related indicators that you can't easily "fudge".
Actors who have a stake in China's growth (or lack thereof) aren't simply looking at a PDF posted by the Chinese government.
For example, China is now Brazil's largest trading partner. In particular, it's the biggest importer of Brazilian goods (e.g. oil and iron). When China's manufacturing output grows or drops, its demand for Brazilian exports grows or drops too.
(One could probably make a stronger case by looking at e.g. Gulf countries instead of Brazil)
Isn't everyone and their dog trying to devalue their currency these days to boost exports? What's the problem with weak yuan? Sure, iPhones will get even more expensive to buy in China (rather funny since they are made there) but other than that it should be a boon to exports, no?
The main problem is a devalued currency stokes inflation, so consumer costs go up (so do producer costs, but that's offset by better export earnings).
China is in the middle of a shift from an export-driven economy to a consumption-driven economy, part of the normal development arc of major economies. But increasing export profits at the expense of households pushes that balance in the wrong direction.
For more (much more!) detail on this, I highly suggest the blog 'China Financial Times' by Peking University professor Michael Pettis: mpettis.com.
But generally, yes: the world has a savings glut, and devaluing your currency helps export your domestic weakness (some economists call devaluation 'exporting your unemployment'). China is in a rather unique situation though.
But in general I agree with your overall statement... everyone talks about China's "ghost cities" as if they are some sort of quixotic or keynesian tomfoolery... but a simpler explanation is simply that China wants to urbanize and grow a middle class as part of the development cycle you mentioned. They probably need a "hard landing" in order to cool off their real estate market and clear out the dead wood of their malinvestment in order to realize that goal.
"$57 trillion in world debt is something quite unlike a savings glut"
That's also $57 trillion in savings. You do realize that someone owns the $57 trillion in debt, right? From the point of view of the owners, that is $57 trillion in savings. If you think debt is all bad, then you are not thinking coherently.
I can't upvote this enough. The balance sheet has two sides. The world is not in debt to aliens. Some of the debt is 'savings' in the ordinary sense: if people accumulate a portfolio of government bonds for their pension for example. But a lot of it is the accumulated wealth of the very wealthy.
Right, of course. But ultimately debts are paid back through energy creation, natural resource extraction, tangible assets, and human labor. The accounting details of fractional reserve banking in a debt based monetary system aside, that is a huge sum of human labor that governments have promised... and if that money ever gets paid off it will require the global workforce to work for decades to do it... I would hardly call that a "savings glut".
if that money ever gets paid off it will require the global workforce to work for decades to do it
How much of that is pensions? People work for decades, in the expectation of a pension, creating the pension liability; and are then going to require possibly decades of other people's work while they themselves are too old to work.
Discussion of "paying it off" is meaningless when it can only be sensibly rolled over forever.
Look that's why I said "if that money ever get paid off" not "when it gets paid off". And of course the only "not extremely bad" alternative is to continually roll over public debts forever. Financing tricks though don't change the value of the underlying assets, which is really the point that I'm making. I don't disagree at all with what you're saying.
The problem is that eventually the debts can grow so large that the people who are expected to service the ever increasing principal and interest payments view the debts and overwhelming and/or odious, and choose to default. Then you get a deflationary spiral (i.e., Greece, Cyprus, etc), or alternatively currencies can hyperinflate to service the debt, which is essentially another form of default (i.e., Japan).
We haven't really seen the current situation before, so don't know how this plays out... but we'll find out soon enough I think.
Devaluing the currency is great for exporting countries, but remember that China's official plan is to develop a consumer based economy. People who use a devalued currency have no purchasing power and inflation can become a huge problem for growth.
If that were actually their plan they would be strengthening their safety net. The Chinese savings glut (and lack of consumer based spending) is driven in no small part about fear of getting ill, growing old poor, etc.
Ever if you adjust for purchasing power parity GDP per capita in China is a fourth of that of the US. It doesn't seem unreasonable to assume that they would like a higher standard of living.
All other things being equal, a weak currency is a good thing for a country. Unfortunately for China, a weak currency comes with a host of other problems, one of the most significant is capital outflow:
Don't tell the wealthiest country per capita in world history that - Switzerland. One of the few European nations that skated through the last decade almost entirely unscathed. They made a mistake in their attempt at currency debasement a while back, however they've almost always gone with a strong currency, and it has done wonders for their well-being. The median Swiss now earns twice what the median German does.
Also don't tell the US from 1820-1970 that. The strong dollar, backed by a gold standard, enabled the US to become the largest economy at warp speed.
A balanced to strong currency is ideal for a country. It provides increased purchasing power for consumers; it lures foreign capital; it keeps import costs low, including for commodities + producers; it keeps inflation from eroding the standard of living of the bottom 3/4 of citizens that can't hedge inflation; and it generates confidence for consumers, foreign investors, domestic investors, and businesses.
Good thing according to what goal? I think countries have various trade imbalances and rectifying them is good for the country. At the end if the day, though, robots will do most of the work.
Seems to me that the real driver of currency devaluation is the price of oil. By devaluing you protect your economy from big shocks because the price of oil stays unchanged, in the local currency. Russia did the same and has managed to maintain an economic boom in manufacturing, new industry, and hight tech military hardware.
You can't pay attention only to numbers. You have to factor in culture, and a culture of hard work and innovation will beat the numbers every time. Not saying that they might not suffer a bit, but lets not forget that economy is a cyclic thing. What goes down will come up before too long because very smart people are hedging against all possibilities.
By devaluing you protect your economy from big shocks because the price of oil stays unchanged, in the local currency. Russia did the same and has managed to maintain an economic boom in manufacturing, new industry, and hight tech military hardware.
That doesn't make sense. The oil price is denominated in US dollars, so by devaluing you push it up. It's true that the price of oil is dropping too, but in the case of China they don't have domestic reserves so that doesn't matter.
Edit - didn't see that the original WSJ article includes quotes by Soros mentioning his short, and also mentioned China's general warnings against shorts. Though the FT article I linked focuses specifically on Soros, and talks a bit about his history too.
> China's already warned Soros just a few days ago not to short the renminbi.
Perhaps it makes more sense to Chinese eyes, but that looks very odd to me. If Soros tries and fails, he'll lose a lot of money, but that would seem to be no concern of the Chinese government. So if the Chinese authorities had no worries about the outcome it seems like they'd have no reason to try and warn him off; since they are trying to warn him off, it suggests they're worried.
The entire thing sort of comes off as an admission of weakness to me, which I doubt was the intention.
They're trying to do the same time thing as Soros did, yes. But even after its recent $300 billion spending spree to defend the yuan, China still has trillions in foreign currency reserves left, orders of magnitude more than the BoE ever did. And they have a cultural imperative against "giving in" to Western capitalist pigs. I really don't think these guys have thought their plan through.
Exactly this. China also likes shows of strength, and would be more than happy to expend large amounts of cash to bankrupt the people trying this, rather than lose face being broken by them.
If each Chinese citizen were to sell $1000 worth of yuan back to the Chinese government in return for 1000 USD, a trillion-dollar reserve would be depleted.
I don't get this. My mental image is all the toddlers of Beijing queuing at the banks, with a wad of banknotes in one hand and a pacifier in the other, unsure which one to give to the teller.
That is all the worse for China, and will only serve to increase the size of the bet against the Yuan. When it comes to currencies, there is nothing that can fix the law of supply and demand. The country can spend huge fortunes avoiding the direction of the market, but it will only make things worse when the fall finally comes. I believe Soros and his friends will make a lot of money here.
Remember when the US was complaining that the yuan was undervalued to make China's exports more competitive?[1] That was back in 2014. Now it's overvalued.
Kyle Bass went all-in, because 'this is much larger than the subprime crisis':
"Kyle Bass’s Hayman Capital Management has sold off the bulk of its investments in stocks, commodities and bonds so it can focus on shorting Asian currencies, including the yuan and the Hong Kong dollar.
It is the biggest concentrated wager that the Dallas-based firm has made since its profitable bet years ago against the U.S. housing market. About 85% of Hayman Capital’s portfolio is now invested in trades that are expected to pay off if the yuan and Hong Kong dollar depreciate over the next three years—a bet with billions of dollars on the line, including borrowed money."
I don't subscribe to the WSJ so I can't read the OP, but I thought the Yuan was wanting to rise, and that china was slowly letting it revalue. I thought all the economic pressure was aligned that way. Chinese have currency controls so they can't easily sell the yuan to buy other currencies (bitcoin is down for the past couple weeks- the one currency which chinese people love and which doesn't have any controls).
In the future, when there is a link to a paywalled article from WSJ on HN, just click on the `web` link. That takes you to a Google search. Then click on the link to the WSJ from Google and you can read the full article.
In the past, yes. China accumulated large reserves in an effort to keep the renminbi weak (in order to boost exports), but now they've begun spending them again in an effort to strengthen it.
It will be interesting to see what happens with China and Russian economies. I think their best chance is major cooperation with other countries via economic development zones (Silk Road, etc.) and trade. It seems like they are betting on a multi-polar world. The problem for Russia and China is the the USA will probably maintain its dominate military role for another decade or so.
That said, I think that the world economic situation is so complex and chaotic that who knows. The USA might have a black swan economic event (my bet would be on a digital credit meltdown, no ATMs, run on cash, etc.) that would affect everything.
Any reason, you, who lives in US and making a living off American companies, would want an unlikely catastrophic event to destroy US, and hoping authoritarian billionnaire dictators in China and Russia to gain even more military power on the world?
Depending in the leverage they used for betting against the HKD these people might be at a serious risk of loosing everything they put there in case the trend doesn't suddenly change or if they don't get enough money from other sources to hold their leverage.
China purposely engineered its economic growth to capture the lions share of the reward, which leaves China with the lions share of the risk. Moreover with capital outflows at record highs the only money going back into China is sovereign so this shouldn't create a net flight of capital in the west that would lead to a liquidity crisis.
China's been in an economic boom for 37 years and for the most part people don't know what a bad market is. This is healthy for China. It will help shine the light on poor management. The question is whether the CCP will make the necessary changes which are antithetical to their stay-in-power strategy.
Reminds me off the speculation against the Estonian currency---they had a peg against the Euro but were also fully backed. (I never followed up whether the peg broke.)
I thought that approach always worked, but it looks like it doesn't for this article. What gives? I thought that was a requirement from Google that users see what the googlebot sees?
If you try to hit the link before googling you'll get paywalled. They Probably stick a cookie on you to prevent you from playing this trick (use another browser or private window).
They must be using some other fingerprinting techniques if that's the case, it's not working in either a private window(chrome) or another browser(firefox).
What I'm about to say is unfortunate but true. China has a big us against the world mentality. Economic "attacks" are often seen as attacks by nation states, not by individuals, and as such, directly reflect foreign policy attitudes. Language like this only adds fuel to the fire. Given the different worldview about how the world works, motivations will always be suspect. Official party mouthpieces will never view such actions as a secular step to simply make money, and many especially uneducated people (who still make up a huge portion of the country) would agree with the mouthpieces on how to understand it. I'm not saying that we should coddle nation states. I am saying that it's unfortunate that I think an economic exercise would result in strained foreign relations at all levels. At the very least, it easily gives the government a scapegoat on which to blame things.
This mentality was necessary for national survival given their history. From being doped up and murdered by imperialist westerners during the opium wars to being occupied and raped by imperial japan.
A unite and take on the world mentality is what allowed China to win sovereignty, and given how far they've come, I'd say the "us against the world" mentality has worked wonders for them so far.
It is a typical pattern on authoritarian mentalities and regimes. You'll find the same in Russia, widely spread among the Latin American left and the supporters of far right Republican candidates (Trump & Cruz).
The best to do is to "give them enough rope so that they hang themselves", unfortunately. Authoritarian, centralized and anti free trade regimes end up broken because they suffocate economic diversity, see Argentina, Venezuela and Russia.
Sanders is simply taking power from several financial elites, and giving it to a single centralized authority. Sanders fails to realize that the biggest institution that is too big to fail, is the U.S. government. We should spend more time dismantling all the government powers, and not adding to them.
The increasing centralization of things like emergency powers that state governors once controlled (details would take research to cite) is worrisome and you make a fair point.
You lost me when you said "all" powers though. The Constitution is a 2nd draft for a reason: We need some centralized power to keep a unified front in order to benefit from the economy of scale it provides.
"reforms focusing on increasing transparency should be accompanied by measures for
strengthening citizens’ capacity to act upon the available information if we are to see positive effects on corruption. "
When I think about it, it's hard to see how this isn't an attack by us.
If this speculation hurts China, then some citizens US citizens have used a tool to attack and 'injure' a soverign nation. Seems like that would be our responsibilty the same way it'd be our responsibilty if we had a citizen milita that staged a raid into another country. Or it's your responsiblity if your kid breaks your neighbor's windows.
And what makes that 'seat of the pants' lawyering correct is that we're talking about soverign entities without an enforcable body of law to regulate their conduct, so we can't get off on a technicality.
Nobody is doing anything wrong though. They are simply buying and selling on open markets. They're not even breaking any Chinese law, or in many cases even doing anything in China itself. Any harm that comes to the Chinese economy will actually be inflicted by China trying to support policies that are not economically viable, but by the hedge funds.
When George Soros, based in New York, 'broke' the bank of England it was not an attack on Britain either by him or the US. He broke no laws. In fact by showing that the ERM was unsustainable and thereby preventing us adopting the Euro* he did us a massive favour. The UK economy is eternally in his debt.
* Alright, it's a bit of a stretch laying that entirely at his feet, but in an alternate timeline where we stayed in the ERM Euro membership was the logical outcome.
> Instances of the United States overthrowing, or attempting to overthrow, a foreign government since the Second World War. (* indicates successful ouster of a government)
China 1949 to early 1960s
Albania 1949-53
East Germany 1950s
Iran 1953 *
Guatemala 1954 *
Costa Rica mid-1950s
Syria 1956-7
Egypt 1957
Indonesia 1957-8
British Guiana 1953-64 *
Iraq 1963 *
North Vietnam 1945-73
Cambodia 1955-70 *
Laos 1958 *, 1959 *, 1960 *
Ecuador 1960-63 *
Congo 1960 *
France 1965
Brazil 1962-64 *
Dominican Republic 1963 *
Cuba 1959 to present
Bolivia 1964 *
Indonesia 1965 *
Ghana 1966 *
Chile 1964-73 *
Greece 1967 *
Costa Rica 1970-71
Bolivia 1971 *
Australia 1973-75 *
Angola 1975, 1980s
Zaire 1975
Portugal 1974-76 *
Jamaica 1976-80 *
Seychelles 1979-81
Chad 1981-82 *
Grenada 1983 *
South Yemen 1982-84
Suriname 1982-84
Fiji 1987 *
Libya 1980s
Nicaragua 1981-90 *
Panama 1989 *
Bulgaria 1990 *
Albania 1991 *
Iraq 1991
Afghanistan 1980s *
Somalia 1993
Yugoslavia 1999-2000 *
Ecuador 2000 *
Afghanistan 2001 *
Venezuela 2002 *
Iraq 2003 *
Haiti 2004 *
Somalia 2007 to present
Honduras 2009
Libya 2011 *
Syria 2012
Ukraine 2014 *
First, it is not Yugoslavia, but Serbia.
Second, USA has nothing to do with it. They only gave financial and logistic support to the opposition for political activities against the dictatorship. Should it be mentioned that the dictatorship that was overthrown had previously ruined and robbed its citizens, and had only a minority support of the citizens? Should also be mentioned that the dictatorship was brutally using police and army against its own citizens, killed political opponents, falsified several election results, push the country through several wars, etc...
I'm not an expert on all of these, but I do know quite a lot about the Great Dismissal[1].
No credible person puts any weight to any theory regarding the US/CIA being involved in any significant way with the this. Wikipedia's coverage is fine (although it is also worth noting that the CIA funded just about every conservative group around during that period, so anyone who was a member was open to the same accusations Kerr was).
That list is very suspect. Ukrainian government saw an overthrow by the US in 2014? Is it referring to the Ukrainian revolution[0]? This list requires some citations.
Re: Ukraine. Overthrowing a democratically-elected government is a revolution or a coup depending on who you ask. That the US favored a "transition" and was a major power broker isn't really disputed. It's interesting that there's no mention of Victoria Nuland, US ambassador to Ukraine, in that wiki article.
Which is precisely why "close encounters" between Chinese & US, or Russian and US, aircraft are treated seriously. Prior to the 2001 Hainan Island incident, it wasn't a serious issue most of the time.
An EP3 is not a fighter. The collision was a prop plane vs a mig 21.
"Yes officer as you can clearly see: I was driving my ferrari. Trying to get away from the old man pushing a wheelbarrow, but he chased me down. Then he slammed right into me."
People and foolish investors think, "Well, China has more than a billion people so it will eventually have a robust and rich economy!" Only, it doesn't work like that (cue the "That's not how this works. That's not how any of this works" lady). Population size is only a tiny facet of a much larger picture. And it's not even a particularly important one, relatively speaking. There are some economists who are now starting to think that having a massive population size may have the opposite effect; it helps you reach a certain point but then your massive size begins to act as an anchor which keeps you from growing further.