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Notes -
https://x.com/TrumpDailyPosts/status/1909263788295041257
https://x.com/unusual_whales/status/1909411006423392583
So the two biggest economies are now locked in a full-scale trade war... I suspect this will be more severe than previous skirmishing. In the past China imposed restrictions on imports of Australian wine, lobster and coal due to us calling for an inquiry into COVID. The Australian government basically ignored this without retaliating and eventually (with a change of govt over here to the less anti-Chinese Labour party) the restrictions were dropped. And they didn't touch iron ore, our biggest and most important export.
But nobody really cares about Australia, there's no loss of face in restoring trade relations like there would be with being seen to submit to Trump. You can show magnanimity to a weaker country but you probably can't show weakness to a peer power. Plus the US-China tariffs seem to be much more comprehensive, there's no shielded goods listed. I highly doubt that Xi will back down here like Trump seems to be asking. Giving a one day ultimatum is quite rude.
It seems that Trump's strategy is to shake down the US's weaker trading partners (the 'other countries which have requested meetings') and try to smash the stronger powers like China and possibly the EU. The EU might even fall into the 'weaker' category if Trump can link security to the trade relationship, Vance and co wanted to send Europe the bill for bombing Yemen since it was mostly European trade flowing through the Red Sea. The US has opportunities for leverage in terms of energy flows now that Russia is persona non grata and with defence via NATO. On the other hand, the EU is run by Trump-haters and they're hardened experts in economically wrecking their own countries, so they may show some backbone.
Anyway, who has more leverage between the US and China?
China's exports to the US ($500 billion) are mostly manufactured goods, electronics and machinery. These are ironically the things you'd need to industrialize the US, though a lot is also consumer goods. China dominates certain industries like port equipment as seen here: https://old.reddit.com/r/Unexpected/comments/11jsyyf/well_thats_unfortunate/
https://tradingeconomics.com/china/exports/united-states
The US's exports to China ($144 billion) are a mix of agriculture/energy and electronics (semiconductors are included in this category), aircraft, machinery.
https://tradingeconomics.com/united-states/exports/china
Personally I favour a supply-focused view of trade conflicts. If you're losing out on $500 billion worth of goods due to high tariffs (an additional 50% on top of the 34% and the previous tariffs really add up!) then that's worse than 34% or 84% if Xi matches on a mere $144 billion. Many of those goods will be prerequisites for US production. A much smaller proportion of Chinese imports will be prerequisites and soybeans/gas can be bought from elsewhere. Plus the Chinese approach to industrial policy seems much more sophisticated, they target key sectors to build up economies of scale. They foster development in high-tech industries with huge state backing. They do plenty on the supply side, tariffs only affect prices and demand. I think China is not too concerned about losing US imports, they want to replace them with indigenous suppliers on the high-end anyway and have been working hard to do this for years and years, that's Made in China 2025. There is no equivalent comprehensive program to reshore production in the US.
And if China loses some of their exports, at least they retain production capacity. Those mobile phones and plastic toys could go to Chinese kids instead.
I've seen others online favouring a demand-focused view, so there is room for difference on this (elasticity matters a lot).
I think China will come out ahead here unless Trump manages some crazy 4D chess bullying other nations into tariffing China too. China is the central hub of the world economy in terms of trade flows, their economy is larger in real terms and their political system seems to be more stable, less erratic.
Edit: https://x.com/typesfast/status/1909362292367802840
This seems even crazier if true, it's like Trump is deliberately trying to crash the US economy with these hasty, no-warning orders and fines. See the thread for details. This is how you don't do industrial policy.
RIP republicans in 2026. Trump truly doesn’t care how far prices rise for basically everything. But if there’s one thing voters don’t forgive, it’s fucking up the economy.
I wonder if this is what it will take for the China bubble to finally burst? They’re so insanely drowning in debt and their economy seems to be extremely shaky in its fundamentals. Yet there’s a bad record on people saying “China is DOOMED” so I hesitate to say this will be the nail in the coffin
What do you mean by shaky in fundamentals?
They have a huge amount of industry and infrastructure that pumps out much of the world's goods. Putting finance to one side, isn't that a sound basis for an economy?
China has high corporate debt, that much is known. But debt is just paper. As long as enterprises are productive and efficient, debt doesn't matter. Regardless of what happens in the realm of paper the real productive wealth remains. All those phones, cars, ships will still be produced in increasingly automated factories. All that housing stock is still there. I remember hearing so much about Evergrande collapsing but there don't seem to be many material consequences from that. On the flipside, a home ownership rate of 96% is pretty good in my view, something is going very right there.
And they have plenty of human capital, the cohorts that will be relevant for the next 20 years have already been born, shrinking birthrates will take decades to really cause any major effect.
I think our media has emphasized China's flaws (debt, pollution, totalitarian political system) excessively and refused to cover their successes (logistics, cost-efficient industrial output, innovation) and so people fall into a state of confusion when Deepseek or Tiktok come out, when BYD starts outhustling Tesla or when the Chinese flew their next-gen fighter IRL, as opposed to in CGI like NGAD.
NGAD prototypes flew years before China's next-gen fighter broke cover. IIRC the US had one flying in 2020. We just didn't advertise.
If the jet can't even be shown to the public then it must be in a fairly early stage of development. Only a few months ago it looked like the whole project was going to be cancelled or turned into a family of systems. These air-superiority fighters can't be kept hidden forever, people have to be trained about them, they'll need to be fielded to airbases...
Furthermore, the Chinese could've and surely were secretly flying their next-gen jets before revealing them.
Public reveals should have more weight than allegations of secret techniques. It shows that a design has been largely worked out and that it's closer to deployment.
I half agree with you.
The thing is that countries will debut aircraft and not procure them. For instance the J-35 debuted in 2012. To the best of my knowledge, the Chinese military has not procured them. Russian examples are the Su-47 and (so far) Su-75. The F-20 is a good American example. The Chinese have debuted two prototypes; they might procure neither or both and they could have been at any stage of development. It is also of course possible that countries would reveal or conceal their aircraft for foreign or domestic political/psyop reasons. In the case of the recent Chinese stealth fighters, they debuted on Mao's birthday, so the data might have been chosen more for its symbolic purpose and less for relevance to their maturity.
The United States has a long history of IOCing and even operationally using aircraft before they are public.
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These prototypes look nothing like the 3D models you have now, however.
I have never seen pictures of those prototypes, not have I seen any 3D models of NGAD.
I've seen promotional or imaginary images, none of which, except probably the two 2D teaser posters that came out after Boeing was announced as the NGAD winner, did not necessarily (to my knowledge) had any visual similarity with "real" aircraft. I still don't think we know much about how NGAD will look.
If you have images of the prototypes or 3D models of NGAD I would be extremely interested to see them, provided I can do so without violating US espionage laws ;)
Do you imply that F-47 is not “NGAD”? The one from 2020 presumably was like that Boeing art.
No. Where's the 3D model?
I don't think literal concept art like this should be taken to necessarily mean anything. (At least three NGAD prototypes flew, so maybe it was real, or maybe it was just something an artist thought would look cool in a press release.)
Do you mean that this “artist's rendering” of F-47 is 2D? Well, I admit this possibility didn't occur to me, but now that I look closer…
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It’s not just that. The evergrande crisis is a good example that their real estate companies are essentially a Ponzi scheme, did you know that in China,
most people buy a home before it’s ever built
And that everyone tries to buy brand new homes because it’s “bad luck” to buy previously owned homes
And that the concrete used in many of these homes is made from. Beach sand (ie it won’t last more than a handful of years) due to cost cutting corrupt practices
that the real estate companies rely on debt to build and if they aren’t made whole by gov (because consumers often refuse to or cannot pay) they will collapse
the above is made worse because housing prices are starting to collapse due to a bunch of factors, so people are paying for mortgages for houses that they cannot sell and get their money back, there’s no appreciation so people are just refusing to buy now
huge numbers of houses sit empty (ghost cities are a massive problem). These buildings decay and are essentially a total loss.
But besides all that, there’s also the problem of municipal debt. You see, in China municipal governments make all of their money through taxing developers. But if the developers stop building (see points above) then the cities cannot pay for their budgets anymore. We are already seeing budgetary crises across many Chinese cities. The CCP will have to bail these cities out as well. But with what money?
All of these crises are made worse by the fact that unemployment is a giant problem. The gov stopped collecting stats on this because it was so bad but about 1/3 of young Chinese are unemployed, and this number will soar due to tariffs
You don’t want to own a Chinese built flat. See above points. It’s quite often tofu dreg, or built in the middle of nowhere
You also have to remember China is an incredibly censorious state. It’s a black box, you will never hear about its problems generally. The CCP insisted they had like, 7 deaths from COVID during the entirety of the pandemic. When we can accurately guess there has been millions of deaths. But if YOU didn’t hear about it? Must be an amazing system!
Hard to say. Most of the births are now in the countryside to poor peasant farmers. Hardly “elite human capital”
One of Scott's book reviews had a neat thesis that homesteading peasants are the first step of the magic formula that produced the Asian tiger countries.
Totally would expect this to produce a better sort of human capital than the Western combo of iPad + tiktok + sleeping through primary ed.
Tried very cursorily to search if the Chinese peasants are the homesteading sort and got as first hit a local paper which sounds like yes, and they now want to run down the homestead system. Maybe that's how they finally fall flat.
Sure. Except the Chinese already have their own version of this. Many Chinese kids are basically checked out of society . “lying flat” is the name of the current youth movement in China, and it’s pretty self explanatory
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If the apartments fall apart, then they can simply move into the ghost cities - problem solves itself.
Seriously, these things may be true to a certain extent but real estate is not the defining feature of the economy. Production is the defining feature of the economy, production of goods. All else rests on top of production. There are no services without goods, even prostitutes need condoms and lingerie...
China is good at cost-efficient production, therefore it follows that their economy is strong regardless of the situation in real estate or whatever else. If the Soviet Union was the biggest producer of manufactured goods on the planet, bigger than the next 10 combined, then it would still be here today. Soviet production was weak, nobody ever cared to tariff Soviet exports because nobody in their right mind wanted to buy a Soviet car, television or anything but oil and minerals.
This is the reverse of the truth. We in the West hear nothing but bad news about China. We hear about protests in Hong Kong, genocide of the uyghurs, trouble with the Dalai Lama, pollution, liveleak industrial accidents, people getting locked in their homes for COVID, people getting their organs stolen, suppression of Christianity, Social Credit (which is blown out of proportion), repression of the LGBT, backdoors in Tiktok and all other Chinese products... and this shadow banking crisis that has been about to destroy the Chinese economy for the last 10, 15, 20 years. I was taught about it in school.
There are positives as well as negatives, the media is only interested in fostering hatred and contempt, preparing people psychologically for war with China. It's just like the 'Iran is 6 months, 3 weeks, 5 milliseconds away from getting the Bomb!' narrative, fearmongering and warmongering. They want us to hate China and also think they'll be easy to defeat, to manufacture consent for war. But in reality China is a very strong country and we need to be more realistic. War may be inevitable but we shouldn't go in half-cocked, assuming our enemies are made of tofu.
The ghost cities are often comprised of the same materials…
Housing is close to one third of china’s GDP. So, sure it’s not the only feature but it’s a huge, gigantic feature of the Chinese economy
Yes they do have a great, huge manufacturing sector. They are still fairly a poor country on a per capita basis, which means threats to their economy loom larger for the average citizen. The Chinese only tolerate their overlords because they are slowly getting richer, but that is precisely when the risk of revolution is greatest is when the citizenry gets a taste of freedom. I think if their economy suddenly stopped growing and stagnated it would be quite devastating for them, far more than for America
As for news, I think we get fairly large amount of positive visions of China all the time online thanks in large part to a combination of wumaos and anti American feelings among internet extremists, who love to throw up glittery pictures of neon Chinese cities at night. -And - Wow look at their rail network! And their drone swarm shows, and drone delivery!
Meanwhile military leaders are getting purged for filling missiles with water instead of fuel. It’s really hard to gauge how strong they are when they haven’t fought a war in four decades (and lost all the wars they did fight)
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How about looming population collapse?
Looming? What do you mean concretely?
There's reportedly been 9.5 million babies born in China last year. Something like 3.6 million in the US; of those, 1.8 million white babies. Accordingly, in 18 years there will be 5 times as many Chinese 18 year olds as there will be their White American counterparts. Yes, they have lower TFR, but at current trends they'll have a vastly larger workforce for many decades.
Most of the non-white babies born in America are hispanic, who make good citizens as a rule- hard workers, their talented tenth can easily keep up with the whites, can learn the million and one practical skills you need to run an industrial society.
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The question is about what the workforce will be doing.
An inverted population pyramid is the grand strategic equivalent of "shooting to wound" to incapacitate three hostiles instead of one.
I don't have very strong opinions as to what will happen In Real Life but historically from what I understand civilizations that lost their TFR edge crumbled regardless of their total population numbers.
How many of those were ethnic minorities in places like Tibet that will be passively or even actively hostile to the Chinese project? It looks like the regions with the five regions with the highest per capita childbirths were:
Google's AI suggests that around 800,000 of those births in China were minority due to relatively straightforward calculus of "national birthrate x 9% of the Chinese population that is minority.) But my priors are that minority groups in China (particularly the Tibetans and Islamic people groups) are going to have disproportionately higher birth rates (Tibet's birth rate appears to be twice the national average!)
Now, if you actually go and look at China's population pyramid, I think it's fairly clear the demographics for them are more of a long-term issue than anything, in the short term they can plausibly kick the can down the road and hope AI or robots or something will save them. It's very unlikely that demographics alone will e.g. decide Taiwan's fate.
Tibet is extremely sparsely populated, so their birth rates are irrelevant. There's like 3.4 million ethnic Tibetans, they can have 5x Han TFR and that won't matter.
All of this is just more cope. I think that for a few decades, there was a foreboding feeling in the west that eventually China will become the dominant superpower, and accordingly much mental energy was dedicated to crafting memes that dispel this impression. Like the idea that ethnic minorities in China will help in breaking it apart (this won't work any better than in Russia), or that low TFR or One-child-policy or pollution or real estate market collapse or COVID lockdowns or the crack in the Three Gorges Dam or the debt or x y z will signify the end of the Mandate of Heaven, or… I hope that soon people will realize how pathetic all this cope is. China is not a paper tiger, it's not all fake and propaganda, in fact they barely care what you think about them, it's a well-organized state, their bureaucrats are smarter than yours, they have repeatedly shown more capacity to remove threats to national stability than you have, and they are systematically patching all remaining vulnerabilities. In a sense, you project your own state's inability to manage itself onto China to see how it might conveniently take itself out of the picture.
This is exactly what they are doing now, but that's also what the US is purporting to do. The problem is that they're very dynamic, in all possible way, and they'll clearly be able to produce millions of robots. Hell, even their Android ROM companies become behemoths that ship high-end race cars and develop humanoid robots (at market cap $127B). Apple (cap $2.6T) has given up on a car after a decade or so of work and is barely able to maintain its phone software. This isn't how things should look when you have a strong position and they're on the verge of collapsing.
Didn't Russia fight a violent internal war against minority separatist groups? I seem to recall that happening.
Broadly I think you are attributing a lot of views to me without any evidence that I hold them. Which is fine, I guess. I think that probably the truth on China is between "OMNICOMPETENT HYPERSTATE OF THE FUTURE" and "weak, lame, dying, about to crack."
As I said, I don't think China is "on the verge" of collapsing over any sort of near-term timescale.
Yes, we won. I refer to the “decolonizing” partition plans during this war, like this one. In reality, the colonized Buryats and all others eagerly enlist and fight in Ukraine (and get killed disproportionately). My point is that even a moderately effective state can easily suppress ethnic minority separatism within its borders, so hoping that China will somehow collapse due to ethnic tensions is not serious.
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Yeah I guess if you don’t count a little thing called “immigration” (leaving aside those birth numbers out of China are likely cooked)
It seems you've collected every possible cope and trope, congrats.
Yes, Venezuelans will surely bail you out in the arms race with China, if you don't deport them to El Salvadoran prisons first.
Sure, it’s only Venezuelans migrating. Except all the best and brightest that America brain drains from every other country. Where did Xis daughter go to school again?
Meanwhile, all of chinas rich flee to America, displaying their utmost confidence in how China is going to lose and lose hard in the near future.
I have nothing against Xi's daughter but I don't think she's very smart. Neither is Xi, for that matter. Rich and powerful Chinese sending their kids to the US is a common pattern when they are incapable of scoring enough on Gaokao to get into a serious Chinese school like Tsinghua.
Brain drain is drastically slowing down. I see accomplished Chinese American scientists actually returning home. The US isn't that attractive any more, and it doesn't want to be attractive. Nature is healing.
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Nah. Immigration is 20th century solution.
21st century solution is annexation. First Greenland, then Canada, then Mexico, then all the way from North to South Pole.
What did you think MAGA meant? vibes? papers? essays?
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