Where most substacks in geopolitics have unavoidable overlaps with each other, Kevin’s substack, and the related YouTube’s, are unique — and uniquely valuable.
Anyone thinking they can fool the Chinese is living in dreamland. Win-win is a great idea but the USA hates it. Sharing and progressing suit genuine human societies. Notice that most of the uses of the rare materials the USA yearns for are to destroy others. It is called "defense" but that is untrue. Give peace" a chance.
David Ricardo called it "comparative advantage." That is to say, nations should focus on what they do best and trade for what they can't easily produce themselves. But what happens when one nation produces everything? Where's the comparative advantage in that arrangement?
A key factor in market analysis is the rate at which markets become saturated and profit margins shrink. A related issue is purchasing power. At some point everyone who can will own an automobile, a cell phone, a TV set and so on, at which point growth slows and manufacture becomes a replacement market, not a growth industry.
I would argue that China is fast approaching that point. You can push that day of reckoning into the future by encouraging domestic consumption, but eventually that reaches saturation as well, plus you have the added problem that high wages are needed to allow a consumer based economy. Meanwhile, your competition with lower costs is nipping at your heels.
I'm not trying to trash China I should point out. I've been there and I like the place, but they are subject to the same limitations as everyone else - limitations that are more accurately described by physics and mathematics than by 19th century ideology.
I take your point but if the US hadn't been sabre rattling and imposing tariffs on China for the past 8 years, the Chinese may well have been still buying US agriculture produce and doing what it could to support it's largest trading partner (as it did during the GFC by buying US treasuries). It was in its own self interest to have a prosperous US. But not any more.
US attitudes towards Russia and China are symptoms of the end of an empire. I come from a British background and you still find that imperial distain for other nations, even after they've left Britain in the dust. Must have driven my parents nuts that both my brother and I married Asian girls...lol. Thai in his case, Japanese in mine.
The concept of multi-polarity is a good one, so much so that there's even a song about it. Too bad the USA can't get on board. A small piece of a big pie is better than a big piece of a small pie or no pie at all.
Yes I know what you mean. I'm a New Zealander and people of my parents generation still called Britain 'home' even if they had been born in NZ and hadn't even been to Britain. Mum and Dad's best friends went to live in Indonesia where they considered themselves 'Ex Pats' rather than 'Immigrants' and looked down their noses at the locals. They learned nothing of Indonesian culture or language and yet back in NZ got angry if people spoke in a language other than English (including Maori!) and went on about people not assimilating.
I'm from a British military family, army on my mom's side, navy on my dad's. (you can picture both family's objections, right?)
Fortunately, owing to a posting my dad had in Japan, both parents spent over 10 years there where they had to adjust to that reality, and they did quite well I would say. My mom and younger sister speak fluent Japanese (dad always had a translator) and my mom even had a career as an advertising model and actor in a Japanese sit-com! She played the wealthy British benefactor of a struggling hotel. I still have the tapes and trust me, it's really weird to watch your mom acting in a Japanese TV show.
1. It was a pandemic (just as J6 was an insurrection); and,
2. We had very low death rates so I had no issue with what our government did. And if mistakes were made, it's because governments were flying blind but trying to do their best.
I actually don't see a down-side in restricting exports of REE's to the US MIC. Anything that limits the USA's ability to impose its will on smaller nations is a benefit IMO.
Tune V. Kevin's analyzes gives a unique & high qualified understanding of what's going on geopolitical, special related to China. I appreciate this very much, as I hardly see this anywhere else so clearly.
Tariffs and Chinese Sanctions on the West and Rare Earth Minerals
Question for the author and a comment:
1) Q: Would you support equal or zero tariffs for both sides?
2) Comment: I worked developing chemicals used in the refining of metals and treating mining wastewaters. I have visited a number of USA mining operations. Very intensive energy wise (fossil fuels) and water resources wise, and regulations can be strict with regards to air and water pollution. I am also very familiar with rare earth metals. Those are the f-block elements.
My experience has been that Chinese companies has been able to copy many of the metal refinement processes and follow lax to non-existant environmental regulations regarding noxious emissions and waste materials treatment and disposal.
These practices, with Government subsidies, have given the Chinese great advantages that the West cannot match or overcome. I do realize that Western countries and companies were complicit in some ways in these activities to make even more money. I do not blame the PRC for doing this, as the door was left wide-open with a welcome mat. Do I like it? No. It has been terribly destructive to the West ultimately.
I am actually happy that the Chinese are putting tariffs on rare earth metals and other materials. The West is now reaping what they have sowed, and hopefully the supply chains will shift at least partially back to the West
There's an excellent documentary called "Manufactured Landscapes" by Edward Burtynsky. It's available on Youtube, or you can find it in the torrents. It has some real eye opening scenes from industrial China. Real horror show.
I was there in 89. People still using coal for heat and cooking. The air in Guangzhou was worse than Mexico city around the same time.
If recent Chinese developments in liquid salt/thorium reactors are any indication, the problem may soon be solved. Ironically, the vast reserves of low grade coal they've been burning are a good source of thorium, so they might not have to open new mines, at least at first. If it scales well, they might be able to eliminate ICEs altogether in the cities, plus the coal can be used to make transportation fuel which will put a dent in their oil imports. This is a very important development that bears watching IMO.
Interesting re Thorium in the fly ash. I have seen other reports about some coal comprising reasonable concentrations of the f-blocks aka rare earths. I was in Shanghai and surrounding industrial areas around 2007. I worked for a USA company called TE Connectivity in product development. I felt bad for the people there as they were treated terribly. There did not seem to be a middle class, it was either rich or poor. Perhaps it has changed.
China is smart to use their massive coal reserves to build out nuclear. Of course they do it for EVs and battery plants too. And solar. Then they off load it to suckers in the West. I don't blame them, it's business.
"Then they off load it to suckers in the West. I don't blame them, it's business."
Heh... turnabout is fair play I guess. We shipped our heavy industry to China to avoid environmental controls and China come up with the solution, which makes sense since innovation often tends to be driven by necessity.
Electric cars make sense in China where most travel is for short distances in urban areas. All automated eventually. Anywhere else you want to go take the train, then just take a cab or rent a car at your destination. I haven't been on the Chinese system, but I've had a few rides on the Shinkansen in Japan. That is definitely the best way to travel between cities, especially in dense areas. You can't even own a car in Tokyo unless you have a private parking space. Pointless anyway as traffic just crawls while the subway is fast, clean and goes just about everywhere.
The US has a trade surplus in service industries with China. I know China has sanctioned Hollywood, and is discouraging tourism and studying in the US. They also have the mbridge as an alternative to SWIFT. It would be interesting to know what other measures China is planning to hit the service industry, especially payments for intellectual property rights.
Maybe move away from Microsoft software? Does China has a cloud services to compete with Amazon and google?
Where most substacks in geopolitics have unavoidable overlaps with each other, Kevin’s substack, and the related YouTube’s, are unique — and uniquely valuable.
Anyone thinking they can fool the Chinese is living in dreamland. Win-win is a great idea but the USA hates it. Sharing and progressing suit genuine human societies. Notice that most of the uses of the rare materials the USA yearns for are to destroy others. It is called "defense" but that is untrue. Give peace" a chance.
"Win-win is a great idea but the USA hates it."
David Ricardo called it "comparative advantage." That is to say, nations should focus on what they do best and trade for what they can't easily produce themselves. But what happens when one nation produces everything? Where's the comparative advantage in that arrangement?
A key factor in market analysis is the rate at which markets become saturated and profit margins shrink. A related issue is purchasing power. At some point everyone who can will own an automobile, a cell phone, a TV set and so on, at which point growth slows and manufacture becomes a replacement market, not a growth industry.
I would argue that China is fast approaching that point. You can push that day of reckoning into the future by encouraging domestic consumption, but eventually that reaches saturation as well, plus you have the added problem that high wages are needed to allow a consumer based economy. Meanwhile, your competition with lower costs is nipping at your heels.
I'm not trying to trash China I should point out. I've been there and I like the place, but they are subject to the same limitations as everyone else - limitations that are more accurately described by physics and mathematics than by 19th century ideology.
I take your point but if the US hadn't been sabre rattling and imposing tariffs on China for the past 8 years, the Chinese may well have been still buying US agriculture produce and doing what it could to support it's largest trading partner (as it did during the GFC by buying US treasuries). It was in its own self interest to have a prosperous US. But not any more.
US attitudes towards Russia and China are symptoms of the end of an empire. I come from a British background and you still find that imperial distain for other nations, even after they've left Britain in the dust. Must have driven my parents nuts that both my brother and I married Asian girls...lol. Thai in his case, Japanese in mine.
The concept of multi-polarity is a good one, so much so that there's even a song about it. Too bad the USA can't get on board. A small piece of a big pie is better than a big piece of a small pie or no pie at all.
https://www.youtube.com/watch?v=0vXbK3g7cM8
We are all one. -- Genki Sudo.
Yes I know what you mean. I'm a New Zealander and people of my parents generation still called Britain 'home' even if they had been born in NZ and hadn't even been to Britain. Mum and Dad's best friends went to live in Indonesia where they considered themselves 'Ex Pats' rather than 'Immigrants' and looked down their noses at the locals. They learned nothing of Indonesian culture or language and yet back in NZ got angry if people spoke in a language other than English (including Maori!) and went on about people not assimilating.
I'm from a British military family, army on my mom's side, navy on my dad's. (you can picture both family's objections, right?)
Fortunately, owing to a posting my dad had in Japan, both parents spent over 10 years there where they had to adjust to that reality, and they did quite well I would say. My mom and younger sister speak fluent Japanese (dad always had a translator) and my mom even had a career as an advertising model and actor in a Japanese sit-com! She played the wealthy British benefactor of a struggling hotel. I still have the tapes and trust me, it's really weird to watch your mom acting in a Japanese TV show.
"I'm a New Zealander"
You have my sympathy. You guys were treated even worse than we were in Canada during the "Pandemic."
1. It was a pandemic (just as J6 was an insurrection); and,
2. We had very low death rates so I had no issue with what our government did. And if mistakes were made, it's because governments were flying blind but trying to do their best.
I actually don't see a down-side in restricting exports of REE's to the US MIC. Anything that limits the USA's ability to impose its will on smaller nations is a benefit IMO.
Tune V. Kevin's analyzes gives a unique & high qualified understanding of what's going on geopolitical, special related to China. I appreciate this very much, as I hardly see this anywhere else so clearly.
If China can slow the global MIC more power to them. We don't need more smartphone and playthings.
Tariffs and Chinese Sanctions on the West and Rare Earth Minerals
Question for the author and a comment:
1) Q: Would you support equal or zero tariffs for both sides?
2) Comment: I worked developing chemicals used in the refining of metals and treating mining wastewaters. I have visited a number of USA mining operations. Very intensive energy wise (fossil fuels) and water resources wise, and regulations can be strict with regards to air and water pollution. I am also very familiar with rare earth metals. Those are the f-block elements.
My experience has been that Chinese companies has been able to copy many of the metal refinement processes and follow lax to non-existant environmental regulations regarding noxious emissions and waste materials treatment and disposal.
These practices, with Government subsidies, have given the Chinese great advantages that the West cannot match or overcome. I do realize that Western countries and companies were complicit in some ways in these activities to make even more money. I do not blame the PRC for doing this, as the door was left wide-open with a welcome mat. Do I like it? No. It has been terribly destructive to the West ultimately.
I am actually happy that the Chinese are putting tariffs on rare earth metals and other materials. The West is now reaping what they have sowed, and hopefully the supply chains will shift at least partially back to the West
There's an excellent documentary called "Manufactured Landscapes" by Edward Burtynsky. It's available on Youtube, or you can find it in the torrents. It has some real eye opening scenes from industrial China. Real horror show.
I found it on Prime too. Will take a look.
When I did business in China it was bleak and very depressing. Terrible air.
I was there in 89. People still using coal for heat and cooking. The air in Guangzhou was worse than Mexico city around the same time.
If recent Chinese developments in liquid salt/thorium reactors are any indication, the problem may soon be solved. Ironically, the vast reserves of low grade coal they've been burning are a good source of thorium, so they might not have to open new mines, at least at first. If it scales well, they might be able to eliminate ICEs altogether in the cities, plus the coal can be used to make transportation fuel which will put a dent in their oil imports. This is a very important development that bears watching IMO.
Interesting re Thorium in the fly ash. I have seen other reports about some coal comprising reasonable concentrations of the f-blocks aka rare earths. I was in Shanghai and surrounding industrial areas around 2007. I worked for a USA company called TE Connectivity in product development. I felt bad for the people there as they were treated terribly. There did not seem to be a middle class, it was either rich or poor. Perhaps it has changed.
China is smart to use their massive coal reserves to build out nuclear. Of course they do it for EVs and battery plants too. And solar. Then they off load it to suckers in the West. I don't blame them, it's business.
"Then they off load it to suckers in the West. I don't blame them, it's business."
Heh... turnabout is fair play I guess. We shipped our heavy industry to China to avoid environmental controls and China come up with the solution, which makes sense since innovation often tends to be driven by necessity.
Electric cars make sense in China where most travel is for short distances in urban areas. All automated eventually. Anywhere else you want to go take the train, then just take a cab or rent a car at your destination. I haven't been on the Chinese system, but I've had a few rides on the Shinkansen in Japan. That is definitely the best way to travel between cities, especially in dense areas. You can't even own a car in Tokyo unless you have a private parking space. Pointless anyway as traffic just crawls while the subway is fast, clean and goes just about everywhere.
The US has a trade surplus in service industries with China. I know China has sanctioned Hollywood, and is discouraging tourism and studying in the US. They also have the mbridge as an alternative to SWIFT. It would be interesting to know what other measures China is planning to hit the service industry, especially payments for intellectual property rights.
Maybe move away from Microsoft software? Does China has a cloud services to compete with Amazon and google?
deleted. wrong location in thread.
(pay attention bear!)