US threatens China with secondary sanctions after Beijing appears to agree to send drones and missiles to help Russia in Ukraine; China threatens its own response to secondary sanctions
For as much as everyone still loves to deride Muldoon, he got parts of it right. What we need now is a mashup of Think Big 2.0 and Green New Deal, only funded by direct public spending and not debt issuance. We need to house, feed, educate and provide the basics for our society, and we need to bring manufacturing capability back onshore. It's a wartime prospect and must be framed as such, including the very real shared sacrifice we will all be asked to make.
There are many reasons why NZ shouldn't send too many exports to China and you've given another one Unfortunately that's where it will end for now, as most of the companies doing the exporting are privately owned, but if China offers you x dollars for a product, but you can only get x- 1 dollars elsewhere, most companies would choose China. And should the government try to direct exports elsewhere, I can already see the headlines ("This communistic labour government"!). So until some sort of adverse event occurs, we'll keep on with the Chinese exports.
Let's hope that all these companies are at the very least keeping alternative exporting channels open.
Thanks John P. You might find many private companies also reconsider. Over 300 of the world's biggest companies and banks have pulled out of Russia in less than a month, partly because of the intense difficulty of operating amid the sanctions, but also because they physically fear for the future of their staff, let alone their assets. There are enough corporate 'war stories' around now about what happens to NZ companies who operate inside China for plenty to realise they may be better out than in. Fonterra has exited its farming and processing assets there because it couldn't trust or control what was happening in its name there. Many others have been burnt and are out. It turns out the fundamentals of democracy, the rule of law and some sort of transparency make capitalism sustainable. Not so much in China.
Mar 15, 2022·edited Mar 15, 2022Liked by Bernard Hickey
China have very little to gain, and a huge amount lose overtly backing/supporting the Russians. I'd also be astounded if the average Russian conscript has a good enough grasp of Chinese to effectively operate that kit, all smells off to me
None the less your point re export market diversification is accurate
Agree .. I think we all said the same thing about Putin. As soon as someones ego decides Taiwan wants to be part of china again its all over. Im not sure the Chinese think quite the same way as we do.
The Chinese definitely don't think the same way we do, the economic pain Russia is suffering over this will make them think even harder before any military action re Taiwan, if it was ever a serious consideration anyway.
I have spent some time in HK and also over the border seeing that area grow from zero to massive metropolis has been incredible. However now I wouldn't go near the place. Its politically unsafe to even be there after what has been happening in HK and the state kidnapping of the Canadian executives after the Huawei incident. Taiwan is quite different and has an oddly positive relationship with japan.
I agree. Hard to say how much of this is US posturing or legit intelligence. Hard to see how the risk/reward could remotely pay off for Xi/China at this point.
Too soon to make assumptions, though always prudent to explore scenarios.
Are we forgetting its not just the exports when just about every thing is made in china. More pressing on the domestic side. I would like to know what our government and planners are doing if any thing on the domestic energy side. If we remember as short a time ago as last winter where electricity prices went sky rocketing and all we could do is import more Indoneisian coal to burn at Huntlly. That same coal now cost twice as much as it did last year. Do we have any long term energy planning for any thing global warming aside. We appear to simply buy every thing we need on the global markets at the current market price. Petrol included. I suppose the ozzies can sell us some coal if they cant send it to china. Then we can all buy expensive US made telecommunications equipment and drugs that are made in india but how are we going to pay for it if we cant sell our cows to china
OMG, Chinese women will have to go back to breast feeding! And as many work long hours away from home, there will be a vast need for breast pumps. Unless, of course, the factories close. One thing to be grateful for, no more live cattle shipments .. let's hope.
Hi Bernard - don't want to derail this topic but the link to the Todd Niall article regarding lawyers taking action over the RLTP was one published in May 2021. Was there a follow up yesterday? I'm hoping they really stuck it to them in court!!
Bernard I read what Gideon Rachmand said about China having the largest foreign reserves but it has just discovered that it could lose access to its war chest overnight. Is this a SWIFT arrangement where China is unable to move it’s money?
The first casualty of war is the truth.
For as much as everyone still loves to deride Muldoon, he got parts of it right. What we need now is a mashup of Think Big 2.0 and Green New Deal, only funded by direct public spending and not debt issuance. We need to house, feed, educate and provide the basics for our society, and we need to bring manufacturing capability back onshore. It's a wartime prospect and must be framed as such, including the very real shared sacrifice we will all be asked to make.
Mission economics.
War economics, and victory gardens for all
I'm still waiting on any politican to just propose a Think Big 2.0, and yet we wait for more inaction.
'... Russia had asked China for equipment and rations to help it in Ukraine.'
"Boris; these rations are all in Chinese, but I think they are two minute noodles".
There are many reasons why NZ shouldn't send too many exports to China and you've given another one Unfortunately that's where it will end for now, as most of the companies doing the exporting are privately owned, but if China offers you x dollars for a product, but you can only get x- 1 dollars elsewhere, most companies would choose China. And should the government try to direct exports elsewhere, I can already see the headlines ("This communistic labour government"!). So until some sort of adverse event occurs, we'll keep on with the Chinese exports.
Let's hope that all these companies are at the very least keeping alternative exporting channels open.
Thanks John P. You might find many private companies also reconsider. Over 300 of the world's biggest companies and banks have pulled out of Russia in less than a month, partly because of the intense difficulty of operating amid the sanctions, but also because they physically fear for the future of their staff, let alone their assets. There are enough corporate 'war stories' around now about what happens to NZ companies who operate inside China for plenty to realise they may be better out than in. Fonterra has exited its farming and processing assets there because it couldn't trust or control what was happening in its name there. Many others have been burnt and are out. It turns out the fundamentals of democracy, the rule of law and some sort of transparency make capitalism sustainable. Not so much in China.
China have very little to gain, and a huge amount lose overtly backing/supporting the Russians. I'd also be astounded if the average Russian conscript has a good enough grasp of Chinese to effectively operate that kit, all smells off to me
None the less your point re export market diversification is accurate
Agree .. I think we all said the same thing about Putin. As soon as someones ego decides Taiwan wants to be part of china again its all over. Im not sure the Chinese think quite the same way as we do.
The Chinese definitely don't think the same way we do, the economic pain Russia is suffering over this will make them think even harder before any military action re Taiwan, if it was ever a serious consideration anyway.
I seem to remember you posting about listening to the podcast while walking about HK...is that right? Are you from there?
Nope, Welli born and bred, never even been to HK alas. I do have a very keen interest in China and China Taiwan in particular though
I have spent some time in HK and also over the border seeing that area grow from zero to massive metropolis has been incredible. However now I wouldn't go near the place. Its politically unsafe to even be there after what has been happening in HK and the state kidnapping of the Canadian executives after the Huawei incident. Taiwan is quite different and has an oddly positive relationship with japan.
I agree. Hard to say how much of this is US posturing or legit intelligence. Hard to see how the risk/reward could remotely pay off for Xi/China at this point.
Too soon to make assumptions, though always prudent to explore scenarios.
Are we forgetting its not just the exports when just about every thing is made in china. More pressing on the domestic side. I would like to know what our government and planners are doing if any thing on the domestic energy side. If we remember as short a time ago as last winter where electricity prices went sky rocketing and all we could do is import more Indoneisian coal to burn at Huntlly. That same coal now cost twice as much as it did last year. Do we have any long term energy planning for any thing global warming aside. We appear to simply buy every thing we need on the global markets at the current market price. Petrol included. I suppose the ozzies can sell us some coal if they cant send it to china. Then we can all buy expensive US made telecommunications equipment and drugs that are made in india but how are we going to pay for it if we cant sell our cows to china
OMG, Chinese women will have to go back to breast feeding! And as many work long hours away from home, there will be a vast need for breast pumps. Unless, of course, the factories close. One thing to be grateful for, no more live cattle shipments .. let's hope.
Hi Bernard - don't want to derail this topic but the link to the Todd Niall article regarding lawyers taking action over the RLTP was one published in May 2021. Was there a follow up yesterday? I'm hoping they really stuck it to them in court!!
Thanks Grant. Yikes. I'll check and update. Sorry about that.
Bernard usually has a laugh in his voice. Last two days podcasts have sounded very strained though. Not good.
Add it Hong Kong type Omicron surge hitting China.
Thanks Chap. I'll try to find the laugh again. Things are pretty good really.
Why did i just hear John Clarke singing "We don't know how lucky we are"?
I wonder if wearing gumboots would have stopped COVID in it's tracks.
Gary Dyall
Bernard I read what Gideon Rachmand said about China having the largest foreign reserves but it has just discovered that it could lose access to its war chest overnight. Is this a SWIFT arrangement where China is unable to move it’s money?
Thanks Gary. No. A specific decision by the US and EU to 'go nuclear' with the financial sanctions.
Thanks Bernard. We certainly could be moving into dangerous territory if China openly supports Russia. Who knows what could happen?
The citizens of Mariapol could commandeer the rations. Sorry, I am in a black humour mood which is a sign that things are really dire.