Understanding China


the captial requirements are one thing but its the concentration of inflated assets that the money is loaned to and its only one asset class for the banks in OZ.
In china its on everything you could imagine and the central party really have no idea on what where and how much.


True, like most banks anywhere but in China it is crony capitalism run amok. They’ll resolve it as they move to their goal of making the Renminbi a sovereign currency. There will be a devaluation of the yuan eventually but my guess it is it will come into reasonable parity with the AUD and USD. May take a few years or less but they must get their game together to achieve their goal as a commodity broker.


the what were and how much is well covered in western countries, P&L’s everyday and cash positions, large fines if you dont especially since 2008 where risk managment was a bit slack hence basel 123
China is too large to govern and these types of institutions are being created every day to catch up so in reality nobody knows how big the problem is.
As the Chinese would say, rules and laws are just impediments to business.

everyday there is one of these,


I think they will issue an internal “brass razoo” once they remove all the cash out of circulation.
Remimbi will be the tradeable currency that you only get on application to the central party.

They are just a consumer of commodities, cant see them being a broker?


The few people who really understand China are the great trading houses such as Swire and Jardine Matheson.

A quick glance at any edition of Swire News shows how well embedded they are and how well connected they are with Chinese officials.

Like China they take a long term view and invest for the long term, not the next election. Politions come and go, but the


Read this article from the April edition of NGM:


Something I have felt for most of my life. “Race” is a construct. It is a tool used to divide us politically for various purposes. I mean, to see, “Hispanic” as a race, or “La Raza(!)” is ridiculous. What IS Hispanic/Chicano/Latino as defined by Race? Is the baseball player Jose Lima Hispanic? Is Senator Ted Cruz Hispanic? And yet here in the Houston area, politicians fall all over themselves chasing the “Hispanic” vote. . .which, is ridiculous and degrading, making the assumption that all people of one skin color (is THAT how we define “Race”?) all think the same way . . but it is used to create artificial diversity. . . .


As I’ve said before… And now I’ll say again because apparently it didn’t sink in (since you tagged me to that post)…I don’t give a shit about race. I care about my country… Americans…

Some have indicated that description isn’t adequate so, for clarity for those stage 4 snowflakes, when I say ‘Americans’, I’m referring to those who are citizens of the sovereign country of The United States of America.


In China the majority is of one race (Mongoloid ) and 92% is of Han Chinese ethnicity.
But there are sizable other groups that exist in parts of modern day China and have occupied those lands for millenials:

What race is “American” anyhow? The majority is Caucasians (at least for now) but a sizeable chunk of US citizens are not. Although there may be more of one specific race, (or of ethnic origin) is certain area, there is no one race or ethnicity that can trace their history in a specific location/ region of America back more than a few hundred years. Even the majority of Native Americans have moved (whether voluntary or forced) from their ancestral lands within the last 200 years or less.

PS> I wrote this before Hawsepiper chipped in.


There is a big difference between race and ethnicity. Skin color is NOT necessarily indicative of race.

Native Americans are Caucasian.

Hispanics are Caucasian.

I’m told that most East Indians are Caucasian

Most “African-Americans” are only partially members of the Negroid race, and partially Caucasian.

Former President Obama is half Caucasian (and he was mostly “raised white” by his Caucasian grandparents).

Ethnicity is a very different thing. We have many different ethnicities and many ethnicities include people of every race.

Hispanics can be 100 percent Caucasian. 100 percent Negroid. Or often are a mix.

In the American Southwest, Hispanics tend to be mostly Caucasian with a bit of Native American mixed in. On the East Coast, Hispanics are mostly Caucasian with a dose of Afro-Caribe mixed in.

Don’t confuse race with ethnicity.



First you post an article that says there are no races and that race is a made up label… Then you proceed to tell us that China is mostly one race and proceed to break down the various races present in America… So… What’s your point? Are you refuting the notion in that article that there are no races? Are you just presenting demographic data for our general information?

Please bless us with the final conclusions from your research on race.


I posted a link to an article in NGM for you to read and without comments.


Swire is expanding and investing in shipping again:

China Navigation has been on the China coast for along time and, as you say, certainly understand China better than anybody else in the business, incl. some of the companies owned by Hong Kong and Singapore Chinese tycoons.

They have changed their operating style to stay in tune with the time, but their roots are firmly planted in China and the South Pacific.


It is interesting that they are entering the bulk market as operators, not owners and the global spread of offices are all in Swire properties. I regularly talk to the London desk - they have the Fiji Sugar contract and have ships coming to Tate & Lyle at Silvertown.

I think their partnership with CTM has been strategic in this and they look to be a player much like Oldendorf.

Having no shareholders they can do what they like.


The present tit-for-tat trade war started by Trump in his wisdom because it fits his US domestic agenda, or maybe to divert attention from his other problems, is not going to end well for American farmers, workers, or for US exporters of manufactured goods and services.

To believe that China will somehow succumb to US pressure and threats is just wishful thinking. The humiliation suffered during more than a century of western dominance and attempts at colonization has not been forgotten and never to be repeated:

There is an underreported fact; US runs a surplus with China on services and has done so for years: https://www.usitc.gov/publications/industry_econ_analysis_332/2017/china.htm

China is also a major foreign investor and a major holder of American debt. If they even just reduce their investments in US Treasury Bonds it will have a negative affect on the US economy and put pressure on the interest rate, which will again affect the US dollar. If they should withdraw their investments and start selling bonds it will be a catastrophe.

The only way to win a trade war is to withdraw entirely from world trade. If you don’t buy and don’t sell anything you are guaranteed not to run a deficit. You can then live happily in your own little world and stay ignorant on anything happening elsewhere. Paradise on earth??


2017 US export to China: $130 billion

2017 US imports from China: $505 billion

2017 US trade deficit with China: - $375 billion

The US trade surplus with China in services is about $ 38 billion

The total US trade deficit in goods and services with China is about - $ 337 billion

It should be obvious to anyone that the US cannot keeping buying three times as much stuff from China as it sells to China. They only way to pay for that is to keep borrowing more and more money from China, or to print more and more paper money. Those are both losing propositions.

The trade deficit with China must be cut. The US must take whatever combination of tariffs and non-tariff barriers is necessary to balance trade with China. There is no other option.

The typical cost of manufacture to retail markup of goods is 500%. So, if it costs $1 to make a widget, it should sell for about $5 at Walmart.

If a 25% Import duty were placed on all Chinese made goods, the cost of the same widget cleared through US Customs would be $1.25. At the standard 500% markup to retail, it would then cost $6.25 ar Walmart. However, if Walmart reduced the markup to 400%, the widget would still retail for $5, the same as before.


There are more to learn about this than the raw numbers as presented above.
For one thing, a lot of parts that goes into producing things assemble in China are produced elsewhere, while the total cost at export is credited to China. (The same applies to US imports from Mexico, Canada especially):

If adding tariffs just add a few cents to the cost, or a few % off the profit margins of US retailers, why bother?? It will not stop the American consumer from buying “cheap sh*t” from China and elsewhere.

BTW: Tariffs are added when imported and paid by the importer to the US Customs, so it just increase the revenue of the US Government.

If you want to balance trade you either have to produce something that the huge Chinese market wants, or import less of the Chinese manufactured goods that the American consumer craves.

Oil and LNG could have been a great equalizer, but there are ample supply from other sources. So, unless you sell at an attractive discount, China don’t need to buy from you.


China has a $337 billion a year trade surplus. Trump wants them to reduce it by $100 billion. That’s still a huge giveaway to China.

Would China rather have a $227 billion trade surplus to build up itsmilitary, or ZERO?

The US got along just fine, actually much better, without importing much of anything from China 40 years ago, the US can do it again.

If China wants to buy soybeans from Brazil instead of the US, that’s fine. When Brazil sells its soybeans to China those sales will just create a new gap somewhere else in the world market that US soybeans will fill. No problem at all.

There are only two places to buy large commercial airplanes: Boeing and Airbus. If China wants to stop buying Boeing, that’s fine. Let China get three years back in the line of orders at Airbus. Others who are displaced by China at Airbus will just buy Boeing.

Can China afford to lose $505 billion a year in sales to the US? I doubt it.

Taxes have to come from somewhere. Much better that they come out of Walmart’s pocket, than my paycheck.


BTW; US DO have trade surplus with some countries:

I don’t here them demanding that US must reduce their unfair practices.


What cannot be lost here is the attention given by addressing this issue. That alone will result in a measurable change. Trump and Xi are cordial, but competitors at the same time. If your respective government identified corporate theft through an exhaustive investigative process, you must act. With a mutually beneficial relationship, lines will be drawn in the sand, and then a compromise will happen. Neither party is dumb. Unlike popular opinions, most Americans could care less about being “the” world economic leader in terms of GDP. But, if someone is stealing from you, that is a different matter all together. It’s not that difficult to get fake Gucci handbags, Rolex watches, Ray Ban sunglasses, movies, or software from China which are all counterfeit and support an industry worth hundreds of millions per year. Maybe it’s just me, but I think it would be wise for a lot more countries to get on board with protecting their own intellectual property rights (although the USA at times must protect their borders, so that may be a stretch and wishful thinking) and damn the Made in China outcome of cheaper products in the short term. Balance will happen naturally over time even if drastic measures are taken. Don’t forget, China is the world’s cheap manufacturing base and relied upon 0% in terms of ingenuity.