The U.S.’ growing urgency in ‘containing’ China’s development was thrown in sharp relief this week as Janet Yellen arrived in Beijing for what turned out to be an execrable beggar’s tour. Just days prior to her arrival, she had buzzed the punditry with her historically memorable exclamation that China was now operating at
The author is a deep state grunt, but capable of intelligence on occasion, not a foolish lawyer for hire, like Philippa Webb (see her CBR drama piece for the European Parliament)
Nonetheless provides a justification of dismissing international law in favour of a fuzzy reading of European history – instead of any attempt to define International Law, or to improve application thereof
Why can not the West do better than this ? ‘Because we do not have to’
Reason One - Explicit -The ascription of agency, and hence the Law, to ‘the most powerful countries’ only : nostalgia for the nineteenth century
The old colonial mindset is still beating it’s heart
« Today, the international community should reinvest in norms of territorial integrity and sovereignty through international law, even at the occasional expense of humanitarian objectives (which should be pursued vigorously through other avenues). The work of the United Nations should focus on interstate peace and territorial integrity. And the international community should think of new approaches to ensuring peace among the world’s most powerful countries. A new “Concert of Powers” modeled after the “Concert of Europe” formed in 1815 is an intriguing idea, one that would bring powerful countries together in an informal forum that offers more space for real dialogue than the U.N. Security Council does. Safeguarding against interstate war is itself an enormous task for international law and international institutions, as the current events in Ukraine demonstrate. »
Reason Two : Explicit- The ascription of good (humanitairian) intent to us, but bad intention to them : intent is 9/10ths of the law
So that our contraventions of international law, those cited by Putin, are absolved of their illegalities, destructions and deaths, legitimised by the fact of their good intent…
Reason Three : Explicit- Existing international ‘bodies’, specifically the hitherto most presitigious of all the UN, are inadequate to purpose
Why the UN should be dis regarded is not made explicit – one may assume it’s because of the presence of all those pesky non powerfuls who always disagree with ‘us’
Except those the west has under control, like Kenya, who’s self serving declared acceptance of colonialist borders merely justifies the continuing status quo of the colonial powers chosen dominant tribes and leaders, and familar ruling class- with repression of the same minorities and the same poor
So-Kenya agreed to send policemen to Haïti – luckily for these policement Haïti decided otherwise
Reason Four : Implicit – it is very hard work thinking up how to form and to conform to and to enforce international legal tribunals or assemblies, a habit of thought the west has lost, along with the power/influence to dominate such to the extent of being able to ignore them
The failure of the west is structural and systematic, the west is de structured and de intelectuelaised just as it has been de industrialised, for the same reasons and to the same results
It’s interesting to think through what Yellen is actually saying when she asks China to address its “industrial overcapacity”, particularly in fields like solar panels or EVs.
First of all, what is “industrial overcapacity”? The official definition for it is “when an industry's production capabilities exceed the demand for its products, leading to inefficiencies and reduced profitability”.
What are the key metrics to assess if a country has “industrial overcapacity”? There are 3:
- Capacity utilization rates: this shows the % of a country’s industrial capacity actually being used. If you don’t use much, you have too much capacity.
- Inventory levels: high levels of unsold goods can indicate that production exceeds demand, suggesting overcapacity.
- Profit margins: declining profit margins in manufacturing sectors might indicate overcapacity, as firms may reduce prices to stimulate sales.
So let’s look at China for all three.
Let’s start with capacity utilization rates. Look at the graphs: it’s crystal clear they’ve been pretty much constant in China for the past 10 years, standing at roughly 76% right now, which is in the same ballpark as America’s own utilization rates at about 78%. So no issue there.
Now let’s take a look at inventory levels. As of the beginning of 2024, China’s finished good inventory PMI index stood at about 49 (en.macromicro.me/collections… ) vs the US at 48 for manufacturing inventories (en.macromicro.me/collections… ). An index of over 50 is a sign of growing stock levels: this is not the case here for either country, so there is no issue with inventory levels.
Lastly, let's check profit margins. China’s industrial profits rose 10.2% in the first 2 months of the year (bloomberg.com/news/articles/… ), consolidating a gaining streak since August last year. So no issue there either.
So what gives? No matter how you look at it, there is just no sign of industrial overcapacity in China.
By accusing China of “industrial overcapacity”, could the US maybe mean that China is breaking WTO rules by practicing “dumping”, meaning the practice where companies export products at prices lower than what they charge in their home market, or below the cost of production? No, this is not what China is accused of doing here: despite the very low prices for its EVs or solar panels, the companies involved still make a profit (heck, as we just saw, industrial profits are rising at double digit growth), and they DO charge higher prices abroad than at home.
No, the real issue here is in fact not one of industrial capacity but one of competitiveness. What is crystal clear is that the competitiveness of Chinese companies is overwhelming: today, in scores of industries - like solar or EVs - there is simply no way for American or European companies to compete with Chinese ones. This is the real issue: Yellen and Western leaders are afraid that if things keep going, China will simply eat everyone’s lunch.
Contrary to popular belief, this competitiveness isn’t thanks to Chinese "cheap labor". One guy who explained this extremely well is Apple’s Tim Cook (inc.com/glenn-leibowitz/appl…): “There's a confusion about China. The popular conception is that companies come to China because of low labor cost. I'm not sure what part of China they go to, but the truth is China stopped being the low-labor-cost country many years ago. And that is not the reason to come to China from a supply point of view. The reason is because of the skill, and the quantity of skill in one location and the type of skill it is.” He credits the Chinese education system for this: “I give the education system a lot of credit for continuing to push on that even when others were de-emphasizing vocational [...] China called that right from the beginning.”
Having a huge depth of skills is one thing, but there is also control of the entire supply chain since China is the only country in the world that produces all categories of goods classified by the World Customs Organization (WCO). This gives it a key advantage when it comes to end prices: when you want to build something in China you can literally find the entire supply chain for it at home.
Energy prices is another thing: for instance the International Energy Agency highlights that "low-cost electricity is key for the competitiveness of the main pillars of the solar PV supply chain" (iea.org/reports/solar-pv-glo… ) and "around 80% of the electricity involved in polysilicon production today is consumed in Chinese provinces at an average electricity price of around USD 75 per megawatt-hour (MWh)". For comparison, in 2023 energy prices for industrial customers in Germany averaged 251.21 USD per megawatt-hour (MWh) (statista.com/statistics/1346… ): that's an incredible 234.94% more expensive!
Lastly, China has become an innovation powerhouse. In 2023 it filed roughly as many patents as the rest of the world combined (brevettinews.it/en/patents/w… ) and it’s now estimated to lead 37 out of the 44 critical technologies for the future (aspi.org.au/report/critical-… ). All this too has implications when it comes to the final prices of its products. To take the example of solar panels again, the IEA notes that "continuous innovation led by China has halved the emissions intensity of solar PV manufacturing since 2011" (iea.org/reports/solar-pv-glo… ), which means that not only does China have raw electricity prices which are immensely cheaper than in the West, but it's innovated in such a way that it uses way less electricity in the production of its solar panels...
So “the threat of China’s industrial overcapacity” is a buzzword that actually means that China is simply too competitive, and by asking it to address this, what Yellen is truly asking of China is akin to a fellow sprinter asking Usain Bolt to run a less fast because he can’t keep up.
Now I’m not saying there isn’t some merit in this ask. At the end of the day, it’s understandable that when you see a competitor continuously gaining in strength, you grow quite anxious as to your own future and that of your people. But it needs to be framed the right way: framing it as if China was doing something malign with deliberate “overcapacity” is just a very unfair characterization. China played the game right: as Tim Cook explained, it first and foremost invested in its people, in their education. They also invested big time in innovation and they didn’t shoot themselves in the foot when it comes to energy prices the way Europe did, among many other policies.
Demonizing this is just not right, and it’s certainly not the right way to ask China for what’s an incredibly big favor: running less fast so the West can keep up… Especially when the West running slow is the result of catastrophic leadership for the past few decades: first and foremost choosing to waste trillions of dollars in killing people abroad instead of investing in its own progress…
I’m afraid this “overcapacity” framing is just another illustration of this poor leadership: when you prefer to blame others for your own failures rather than face reality.
I would be more inclined to believe you if China respected rights more. However these days, the West have diminishing rights everywhere as well, so I'm guessing we're on track to pass each other somewhere in the next decade.
1: When an insolent upstart nation’s surging economic activity totally humiliates the reigning hegemon’s own faltering economy, causing the many expensive dentures and porcelain veneers of the ruling class gerontocracy to jiggle and grate with moral outrage and jealousy."
My first thought to Simplicius' definition of overcapacity was" I wonder which dictionary gave him that answer. Something is wrong here". Silly me.
Congrats on your continuing success. Regarding China. How is it that the US needs their industrial capacity and their purchase of US debt BUT AT THE SAME TIME China is an enemy and we're (US) definitely going to war against them?
The Thucydides Trap is one thing when war is fought with swords and sandals. It is quite another when nuclear weapons are involved. The US needs to pull its head out of its ass. The Rules Based Order based on military and economic extortion needs to be sacrificed on the alter of the Constitution and the Rule of Law. The world is plenty big enough for China, Russia, the US, and several other big players. A Westphalian world order works.
As for your standing on the list, taking down Chris Hodges will be nice. However, when you pass Timothy Snyder I will rejoice loud and well. Your hard work is paying off. Well done.
"The fact is, Israel is a destructive parasite sucking the lifeblood out of America, causing the host to wage unnecessary wars on its behalf which have utterly removed every advantageous and competitive edge the country might have had over its Chinese ‘rival’."
It's true but it so rare to hear it spoken and so clearly, it's kind of overwhelming.
Yellen conveniently ignores basic economics of supply and demand, and she also seems to ignore the global warming high-priests. (How dare she! They *will* be angry).
If China is "flooding the market", then surely that's great for western inflation, isn't it? It means prices for those symbols of the Western green utopia - the solar panels and EVs, will become super cheap and abundant, and inflation reduces accordingly.
Better yet, markup on these items can increase without increasing prices, and the western salespeople, of which there are many, can become rich with minimum effort, and everyone likes that.
But even more important, if China is "flooding the market", then that means Western factories needn't bother existing, and they can stop using the dirtiest of energy, and stop causing pollution, and that's simply fantastic for the high-priests of global warming. They happily promote the destruction of all industry and energy extraction, and a return to pre-industrial standards of living.
Once the Chinese Morlocks are solely responsible for making everything in their factory-nation, then all the western Eloi need to do is live in their green socialist utopia, eat bugs, and plant some trees each year to offset the Chinese pollution.
.
https://www.youtube.com/watch?v=lriWlHZAy8A
Never turn your back on Russia (The Ripper), Zelinsky. The end nears.
9 April 2024 The Infamous Rules Based Order Re Defined, and Re Jected
‘International Law and the Russian Invasion of Ukraine’ February 25, 2022
https://www.lawfaremedia.org/article/international-law-and-russian-invasion-ukraine
The author is a deep state grunt, but capable of intelligence on occasion, not a foolish lawyer for hire, like Philippa Webb (see her CBR drama piece for the European Parliament)
Nonetheless provides a justification of dismissing international law in favour of a fuzzy reading of European history – instead of any attempt to define International Law, or to improve application thereof
Why can not the West do better than this ? ‘Because we do not have to’
Reason One - Explicit -The ascription of agency, and hence the Law, to ‘the most powerful countries’ only : nostalgia for the nineteenth century
The old colonial mindset is still beating it’s heart
« Today, the international community should reinvest in norms of territorial integrity and sovereignty through international law, even at the occasional expense of humanitarian objectives (which should be pursued vigorously through other avenues). The work of the United Nations should focus on interstate peace and territorial integrity. And the international community should think of new approaches to ensuring peace among the world’s most powerful countries. A new “Concert of Powers” modeled after the “Concert of Europe” formed in 1815 is an intriguing idea, one that would bring powerful countries together in an informal forum that offers more space for real dialogue than the U.N. Security Council does. Safeguarding against interstate war is itself an enormous task for international law and international institutions, as the current events in Ukraine demonstrate. »
Reason Two : Explicit- The ascription of good (humanitairian) intent to us, but bad intention to them : intent is 9/10ths of the law
So that our contraventions of international law, those cited by Putin, are absolved of their illegalities, destructions and deaths, legitimised by the fact of their good intent…
Reason Three : Explicit- Existing international ‘bodies’, specifically the hitherto most presitigious of all the UN, are inadequate to purpose
Why the UN should be dis regarded is not made explicit – one may assume it’s because of the presence of all those pesky non powerfuls who always disagree with ‘us’
Except those the west has under control, like Kenya, who’s self serving declared acceptance of colonialist borders merely justifies the continuing status quo of the colonial powers chosen dominant tribes and leaders, and familar ruling class- with repression of the same minorities and the same poor
So-Kenya agreed to send policemen to Haïti – luckily for these policement Haïti decided otherwise
Reason Four : Implicit – it is very hard work thinking up how to form and to conform to and to enforce international legal tribunals or assemblies, a habit of thought the west has lost, along with the power/influence to dominate such to the extent of being able to ignore them
The failure of the west is structural and systematic, the west is de structured and de intelectuelaised just as it has been de industrialised, for the same reasons and to the same results
💯
“The U.S. funds wars, while China funds development.”
The mask is off, you go full anti semite.
You blame the Jews for the choices the US government decided to itself.
The US government is an aggressive Imperialist state, and was one way before the founding of Israel.
The victim mentally and scapegoating is pathetic.
The Xiaomi factory can only be described as a beautiful piece of art and engineering - a wonder to behold.
To add to S's comments please find this from Arnaud Bertrand
9 April 2024 China overcapacity Arnaud Bertrand
https://nitter.poast.org/RnaudBertrand/status/1776486765463048674#m
It’s interesting to think through what Yellen is actually saying when she asks China to address its “industrial overcapacity”, particularly in fields like solar panels or EVs.
First of all, what is “industrial overcapacity”? The official definition for it is “when an industry's production capabilities exceed the demand for its products, leading to inefficiencies and reduced profitability”.
What are the key metrics to assess if a country has “industrial overcapacity”? There are 3:
- Capacity utilization rates: this shows the % of a country’s industrial capacity actually being used. If you don’t use much, you have too much capacity.
- Inventory levels: high levels of unsold goods can indicate that production exceeds demand, suggesting overcapacity.
- Profit margins: declining profit margins in manufacturing sectors might indicate overcapacity, as firms may reduce prices to stimulate sales.
So let’s look at China for all three.
Let’s start with capacity utilization rates. Look at the graphs: it’s crystal clear they’ve been pretty much constant in China for the past 10 years, standing at roughly 76% right now, which is in the same ballpark as America’s own utilization rates at about 78%. So no issue there.
Now let’s take a look at inventory levels. As of the beginning of 2024, China’s finished good inventory PMI index stood at about 49 (en.macromicro.me/collections… ) vs the US at 48 for manufacturing inventories (en.macromicro.me/collections… ). An index of over 50 is a sign of growing stock levels: this is not the case here for either country, so there is no issue with inventory levels.
Lastly, let's check profit margins. China’s industrial profits rose 10.2% in the first 2 months of the year (bloomberg.com/news/articles/… ), consolidating a gaining streak since August last year. So no issue there either.
So what gives? No matter how you look at it, there is just no sign of industrial overcapacity in China.
By accusing China of “industrial overcapacity”, could the US maybe mean that China is breaking WTO rules by practicing “dumping”, meaning the practice where companies export products at prices lower than what they charge in their home market, or below the cost of production? No, this is not what China is accused of doing here: despite the very low prices for its EVs or solar panels, the companies involved still make a profit (heck, as we just saw, industrial profits are rising at double digit growth), and they DO charge higher prices abroad than at home.
No, the real issue here is in fact not one of industrial capacity but one of competitiveness. What is crystal clear is that the competitiveness of Chinese companies is overwhelming: today, in scores of industries - like solar or EVs - there is simply no way for American or European companies to compete with Chinese ones. This is the real issue: Yellen and Western leaders are afraid that if things keep going, China will simply eat everyone’s lunch.
Contrary to popular belief, this competitiveness isn’t thanks to Chinese "cheap labor". One guy who explained this extremely well is Apple’s Tim Cook (inc.com/glenn-leibowitz/appl…): “There's a confusion about China. The popular conception is that companies come to China because of low labor cost. I'm not sure what part of China they go to, but the truth is China stopped being the low-labor-cost country many years ago. And that is not the reason to come to China from a supply point of view. The reason is because of the skill, and the quantity of skill in one location and the type of skill it is.” He credits the Chinese education system for this: “I give the education system a lot of credit for continuing to push on that even when others were de-emphasizing vocational [...] China called that right from the beginning.”
Having a huge depth of skills is one thing, but there is also control of the entire supply chain since China is the only country in the world that produces all categories of goods classified by the World Customs Organization (WCO). This gives it a key advantage when it comes to end prices: when you want to build something in China you can literally find the entire supply chain for it at home.
Energy prices is another thing: for instance the International Energy Agency highlights that "low-cost electricity is key for the competitiveness of the main pillars of the solar PV supply chain" (iea.org/reports/solar-pv-glo… ) and "around 80% of the electricity involved in polysilicon production today is consumed in Chinese provinces at an average electricity price of around USD 75 per megawatt-hour (MWh)". For comparison, in 2023 energy prices for industrial customers in Germany averaged 251.21 USD per megawatt-hour (MWh) (statista.com/statistics/1346… ): that's an incredible 234.94% more expensive!
Lastly, China has become an innovation powerhouse. In 2023 it filed roughly as many patents as the rest of the world combined (brevettinews.it/en/patents/w… ) and it’s now estimated to lead 37 out of the 44 critical technologies for the future (aspi.org.au/report/critical-… ). All this too has implications when it comes to the final prices of its products. To take the example of solar panels again, the IEA notes that "continuous innovation led by China has halved the emissions intensity of solar PV manufacturing since 2011" (iea.org/reports/solar-pv-glo… ), which means that not only does China have raw electricity prices which are immensely cheaper than in the West, but it's innovated in such a way that it uses way less electricity in the production of its solar panels...
So “the threat of China’s industrial overcapacity” is a buzzword that actually means that China is simply too competitive, and by asking it to address this, what Yellen is truly asking of China is akin to a fellow sprinter asking Usain Bolt to run a less fast because he can’t keep up.
Now I’m not saying there isn’t some merit in this ask. At the end of the day, it’s understandable that when you see a competitor continuously gaining in strength, you grow quite anxious as to your own future and that of your people. But it needs to be framed the right way: framing it as if China was doing something malign with deliberate “overcapacity” is just a very unfair characterization. China played the game right: as Tim Cook explained, it first and foremost invested in its people, in their education. They also invested big time in innovation and they didn’t shoot themselves in the foot when it comes to energy prices the way Europe did, among many other policies.
Demonizing this is just not right, and it’s certainly not the right way to ask China for what’s an incredibly big favor: running less fast so the West can keep up… Especially when the West running slow is the result of catastrophic leadership for the past few decades: first and foremost choosing to waste trillions of dollars in killing people abroad instead of investing in its own progress…
I’m afraid this “overcapacity” framing is just another illustration of this poor leadership: when you prefer to blame others for your own failures rather than face reality.
"They own apartments at a much higher rate and with a lot more equity than Americans."
The Chinese only own their homes for 70 years.
Hi! Please stop making us look incompetent! (Insert impotent threat here)
I would be more inclined to believe you if China respected rights more. However these days, the West have diminishing rights everywhere as well, so I'm guessing we're on track to pass each other somewhere in the next decade.
"overcapacity
noun
o·ver·ca·pac·i·ty: ō′vər-kə-ˈpa-sə-tē
1: When an insolent upstart nation’s surging economic activity totally humiliates the reigning hegemon’s own faltering economy, causing the many expensive dentures and porcelain veneers of the ruling class gerontocracy to jiggle and grate with moral outrage and jealousy."
My first thought to Simplicius' definition of overcapacity was" I wonder which dictionary gave him that answer. Something is wrong here". Silly me.
Congrats on your continuing success. Regarding China. How is it that the US needs their industrial capacity and their purchase of US debt BUT AT THE SAME TIME China is an enemy and we're (US) definitely going to war against them?
The Thucydides Trap is one thing when war is fought with swords and sandals. It is quite another when nuclear weapons are involved. The US needs to pull its head out of its ass. The Rules Based Order based on military and economic extortion needs to be sacrificed on the alter of the Constitution and the Rule of Law. The world is plenty big enough for China, Russia, the US, and several other big players. A Westphalian world order works.
As for your standing on the list, taking down Chris Hodges will be nice. However, when you pass Timothy Snyder I will rejoice loud and well. Your hard work is paying off. Well done.
"The fact is, Israel is a destructive parasite sucking the lifeblood out of America, causing the host to wage unnecessary wars on its behalf which have utterly removed every advantageous and competitive edge the country might have had over its Chinese ‘rival’."
It's true but it so rare to hear it spoken and so clearly, it's kind of overwhelming.
Maybe she also was beggin for enough dough to keep scAmerica afloatin....
Yellen conveniently ignores basic economics of supply and demand, and she also seems to ignore the global warming high-priests. (How dare she! They *will* be angry).
If China is "flooding the market", then surely that's great for western inflation, isn't it? It means prices for those symbols of the Western green utopia - the solar panels and EVs, will become super cheap and abundant, and inflation reduces accordingly.
Better yet, markup on these items can increase without increasing prices, and the western salespeople, of which there are many, can become rich with minimum effort, and everyone likes that.
But even more important, if China is "flooding the market", then that means Western factories needn't bother existing, and they can stop using the dirtiest of energy, and stop causing pollution, and that's simply fantastic for the high-priests of global warming. They happily promote the destruction of all industry and energy extraction, and a return to pre-industrial standards of living.
Once the Chinese Morlocks are solely responsible for making everything in their factory-nation, then all the western Eloi need to do is live in their green socialist utopia, eat bugs, and plant some trees each year to offset the Chinese pollution.
Perhaps Yellen didn't get the memo?