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First Google, now Apple

Quote:
Beijing appears to have begun a long-term campaign against foreign brands. This year’s 3.15 program also targeted Volkswagen. Last year’s show went after McDonald’s and Carrefour. In December, state media hit Yum Brands. And not all foreign companies are as fortunate as Apple, which looks like it escaped damage because an actor flubbed his lines. Some of the Chinese government’s attacks are having an effect: Yum’s same-store sales in China plunged 20% in the two months following the December reporting.

Moreover, Google has been the object of a multi-year effort to undermine its operations in China, and Beijing just signaled it was upping the stakes. This month, China’s Ministry of Industry and Information Technology issued a white paper claiming that China was too dependent on the company’s Android mobile operating system.


Appears that China escalating cold currency war into all-out trade war. WTO will be of no help, anything done "unofficially" will be officially denied.

This does not look good for multinational corporations.


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So question is, would China manage to deal enough damage to US before Chinese housing market collapses and takes with it economy? Post-collapse they won't be in position to do this and will likely capitulate wholesale - both currency and trade wars.


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Hmm. I wonder.Do you think a housing collapse will have the same effects there as it does here? I will admit I am not well versed in the details of Chinese economy. Gaps in my knowledge combined with the fact that in Chinese economy is even more intertwined with politics than US economic activity makes it very difficult for me to get a bead on how things might play out.

It seems to me that with their reserve currency surpluses and predilection for large scale Keynsian projects that they could alleviate their housing bubble at any time they chose. Or, conversely, orchestrate takovers of troubled entities and slow housing expansion if a pop seems likely, and maintain the status quo.

Also, it seems as though a far smaller percentage of their overall GDP is dependent on pure financial services than the US. This just leads me to wonder if their housing issues will play out any recognizable form, in comparison to ours.

But then again, see initial disclaimer.

Do you think it would be similar?


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Housing collapse will undermine internal, non-export based economy that CCP are trying to create. There aren't any traditional checks and balances or private enterprise involved in housing as we know it here, so in effect _everything_ is TBTF in China.

Housing collapse will severely undermine Chinese leadership, likely will result in return to power of traditionalist/conservatives and will be a 20-year setback.


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So you think it will actually collapse? In the near future?


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Yes, I think so.

China has two choice at this point - float currency and let deflation kill its export economy or try to keep up with QEs and overheat housing market and kill off internal economy.

Later option is less damaging.


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I see what you are getting at. So you do not think that they have the ability to maintain the bubble? I just figured with another 900 million odd people still in the potential market for new housing that they could continue pushing QE driven housing investment for the foreseeable future as long as mfg and infrastructure investment kept growth apace to continue luring people to more urban areas.

Though I admit its a weakly held view, as I said there is a lot I do not understand about Chinese dynamics at play.


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You have to consider that out of entire population only small fraction is what we would consider consumers. Lifting masses out of poverty would deflate housing bubble, but doing so would increase labor costs and would make maintaining totalitarian regime harder.

I'd consider Chinese housing market close to being saturated.


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So I guess determination of Chinese future, is basically on how quick you think they can continue creating additional "consumers"?

Now that you mention it, I see to recall even official Chinese economic policy statements operating somewhat along that line of thinking. Though they of course couch it in terms of wealth inequality - it would not surprise me if their real thinking was more along the lines you are talking about.


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I am by no means an expert, so don't invest on this without doing your own research first.


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