China Threatens USA

[tjscott0]

https://jalopnik.com/china-sends-a-warning-to-the-u-s-about-…

Chinese Ambassador Qin Gang had a message for the U.S. about its plan to establish a domestic EV supply chain: “Don’t.” Okay, so the Chinese envoy’s message was more diplomatic and detailed than that, but it was basically a warning to the U.S. against cutting China out of its EV supply chain altogether.

Because if the U.S. goes ahead with its plan, it would end up hurting both country’s interests, as Bloomberg reports. China claims these interests are “intertwined,” and upsetting the established order of the global supply chain would damage both the U.S. and Chinese economies.

The Chinese ambassador says cutting China off will end up cutting the U.S. out of the Chinese car market, and vice versa. American carmakers like GM, Ford and Tesla could lose access to the biggest auto market in the world.

it starts to look like China isn’t really interested in selling its EVs in the U.S.; it’s mostly interested in keeping a lucrative role supplying the majority of EVs sold in the U.S. or anywhere else.

Will the Chinese cut off access to mainland China? Or is it a bluff?

The last quoted paragraph I believe is incorrect. I have read news stories about NIO & Xpeng plans for expansion to the US market by 2025. Likely they are not the only Chinese EV manufacturers looking for international sales.

[steve203]

The Chinese ambassador says cutting China off will end up cutting the U.S. out of the Chinese car market, and vice versa. American carmakers like GM, Ford and Tesla could lose access to the biggest auto market in the world.

Keep in mind, it was the Shiny CEOs that were so blinded by getting their hands on those Billion Chinese consumers that they signed on to the Chinese requirement to partner with a Chinese company and share technology. Now, twenty odd years later, the Shiny CEO’s are crying about the Chinese “stealing” the technology the USians and Europeans gave them.

I sent a cartoon to a few people the other day, of a worker chasing a carrot held in front of him on a stick. He never got the carrot.

US automaker market share in China, 2021:

Buick 3.9%, down from 4.6%

Chevrolet 1.3%, down from 1.6%

Ford 1.2% down from 1.4%

Cadillac 1.1%, down from 1.2%

Lincoln 0.4%, up fro 0.2%

Jeep 0.1%, down from 0.2%

https://carsalesbase.com/china-car-sales-analysis-2021/

Like the guy in the cartoon, Shiny visions of vast profits from China are getting farther away, as the Chinese have learned how to build competitive cars, and take share away from the foreign brands.

Shiny cars are losing share, and will probably all end up like Jeep, so the Chinese threat is hollow, taking a market away from the Shiny companies that they are already losing.

In case you missed it, Stellantis announced they are ending Jeep production in China due to uneconomic low volume. As usual, management blamed Jeep’s failure in China on “big gummit”, not management’s failure, but the fact is Jeep sales in China have been falling for several years.

Jeep Pulls Out of China Over Government Meddling in Business

The CEO’s candid comments offer a deeper explanation than initially given for Stellantis’s announcement last week that it’s terminating a 12-year manufacturing partnership with state-owned Guangzhou Automobile Group. Jeep is exiting as more established foreign auto brands have struggled to maintain their share of the market, raising questions about their long-term future in China.

Tavares pointed to German and US-branded vehicle sales falling by about a fifth in China during the first half, as well as a double-digit drop for Japanese brands, while domestic companies’ sales rose.

https://www.bloomberg.com/news/articles/2022-07-28/jeep-pull…

Steve

[OrmontUS]

Will the Chinese cut off access to mainland China? Or is it a bluff?

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It is a question of weighing interests and asymmetrical negotiation. If the US applies tariffs to prevent the competitive access of Chinese cars or components into the US, I would think it rational for China to do the same in retaliation. We have our current 7% of their market to lose and they have their current 0% of ours to lose.

Of course that is a gross oversimplification, but we have to remember that there will be US winners and losers (as well as Chinese) whether there are high trade barriers or low. (If the manufacturing is done here, the beneficiaries will be the members of thee UAW, but the consumer will likely pay a higher price for the car. The car companies may make incremental Us profit, but will lose access to the Chinese market as well as cheaper Chinese production of components).

So, yes, I would expect that there could be a period of seeing who could hold their breath longer, but I suspect China has larger lungs.

Jeff

[wzambon2]

So, yes, I would expect that there could be a period of seeing who could hold their breath longer, but I suspect China has larger lungs.

Those lungs may be larger, but they are much older and not many new young cells are replacing the older lung cells.

The lungs also have emphysema.

China has 8-10 more years left in its run. It’s already slowing down and has pretty much figured out that now is the time to make its run for dominance, before its inevitable demographic and economic decline snatches that chance away.

And to make that run, China (actually Xi) is reverting to Maoist top down, authoritarian form, which is already beginning to fray China’s relationships in that part of the world.

Japan has been re-arming for several years.

Taiwan is pursuing its porcupine strategy.

Vietnam is wary.

The Philippines are making nice again to the US as China continues its bully policy in the South China Sea.

The Australians po’d the French by skipping that contract for quiet conventional subs, instead going with with the British to help them build nuclear subs.

And though Modi and Xi might sing occasionally from the same page, Xi carved out some disputed territory in the Himalayas quite recently that resulted in the deaths of a few hundred Indian troops, which have now been replaced by even more Indian troops on India’s border with China.

Increasingly, developing world economies see clearly the strings attached to China’s “development” aid and don’t wish to become Chinese satraps.

Though the next decade will be fraught with danger, we can contain Chinese expansion.

But it will demand we get serious about it. In addition to gearing our military more completely to facing that primary threat, it will require an adult statecraft that not only confronts authoritarian expansion, but does so clearly and consistently, without the impulsive reactivity that can start a major war.

That major war may come anyway, and the trigger might well be Taiwan.

Such is the challenge posed to the world’s democracies.

[Leap1]

The Chinese market is losing value. Meaning the country wont recover much from wherever or whenever it finds an economic bottom.

The strategic ideal for China is to replace simpler heavy industry with higher tech industry. We should not be a party to that. It is not in our national interests.

The tariffs placed in the last admin only increased imports to the US. Tariffs are not really the issue. We have the wealth among those who buy EV to afford Chinese EVs. There are two other issues. The Chinese domestic designers of EV are not yet doing so for the American or European markets. The designs are different.

The other issue is Tesla. Musk has bet on China, but the majors in the US that are unionized are not betting on China for EV. I am not speaking to their Chinese ICE offerings. GM and F know they will lose the Chinese market for ICE. Never mind EV.

But what gets to the bottom of where that is leading? Batteries. The US government outlays and the private sector have to control the battery markets in the west. We can not leave that to or support that in the hands of China.

Just because the Chinese government says something does not make it true. Well no freak’n crap!