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Post by Baron von Lotsov on Jun 5, 2024 9:13:12 GMT
Rather than indulging in one of your trademark meandering reveries why not answer the questions I actually posed? I corrected you on a point about Hungary's foreign investment.
I thought you already knew why BASF etc are leaving. I'd already hinted at it in a previous post where I said Germany got its industry to where it did by cheap energy from Russia. German energy is now the most expensive so they can't make a profit in Germany. BASF take in raw materials and produce chemicals which are then used in factory production. China is the world's manufacturer so it makes sense to be close to your customers.
Anyway, rather that slag off my solutions, do you have any better ideas what we should do? Just dismissing others ideas without your own solutions is weak.
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Post by Baron von Lotsov on Jun 6, 2024 11:51:07 GMT
Right so you have not got anything to say about that.
What was interesting was a debate I just heard on the BBC Radio 4 a moment ago where they had a number of reps from the European and Chinese car manufacturers and Victor Gao. I did not catch the whole debate, but it was interesting where the BBC man said, right then, so no one in this room is thinking that the UK should follow the EU and America on increasing protectionism against the Chinese car manufacturers re raising tariffs, and the right thing to do was allow the UK to be a fully competitive market in order to drive prices down.
This is great news, but I hope the government is listening. If the US and the EU raise protectionism then the sun will shine in the UK and it will get ahead of the game and have higher quality cars for cheaper. This could be the first major advantage of leaving the EU. China will respect such a position, being the capitalists they are.
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Post by Dan Dare on Jun 6, 2024 12:45:22 GMT
There's little point in driving prices down by allowing completely open tariff-free access to UK market for Chinese goods if by so doing you drive down local wages at the same time. In order to afford Chinese stuff, no matter how cheap, British consumers need have jobs and earn enough by exporting stuff of their own. This is Macroeconomics 101. I corrected you on a point about Hungary's foreign investment. {/i]
While it is true that in 2023 Chinese investment in Hungary accounted for 44% of Chinese FDI into the EU, overall Chinese FDI was lower in 2023 than in 2010. And at a paltry €6.8 billion in 2023 that was less than a seventh of the investment in 2016. Add to that that the bulk of investment was in two battery plants it highly this was a one-off event unlikely to be repeated in future years. In the scheme of things Orban's love affair with Xi is mice-nuts.
I thought you already knew why BASF etc are leaving. I'd already hinted at it in a previous post where I said Germany got its industry to where it did by cheap energy from Russia. German energy is now the most expensive so they can't make a profit in Germany. BASF take in raw materials and produce chemicals which are then used in factory production. China is the world's manufacturer so it makes sense to be close to your customers.
You claim that because BASF is investing in a JV in China it is 'leaving' but don't make a similar claim for CATL and its battery plant in Hungary. Why's that?
Anyway, rather that slag off my solutions, do you have any better ideas what we should do? Just dismissing others ideas without your own solutions is weak.
I've already presented a better idea but you have chosen to ignore it.
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Post by Red Rackham on Jun 6, 2024 15:46:04 GMT
BASF have built a huge plant in China so they are leaving.Why do you assume that because BASF is investing in Chine that means they are 'leaving'? Volkswagen are in the process of transferring manufacturing to China and I think there are others in the car sector (BMW?). VW (and BMW) have been manufacturing in China for many years through the vehicle of their state-mandate JVs so what exactly is the manufacturing you believe they are 'transferring' to China? Over in the Netherlands ASML are setting up in China but use Zeiss optics.Unclear what Zeiss optics have to do with it but you ought to be aware that ASML's top of the line EUV product lines are barred from export to China. Meanwhile As I was mentioning Hungary has had a lot of Eastern investment and Huawei want to set up factories in Eastern Europe.Perhaps they do, but Hungary barely registers on the charts of Chinese FDI into Europe. In 2022 Martin Brudermulle CEO of BASF the worlds largest chemical company, warned that energy costs in Europe were too high and must be cut. Energy costs were not cut. In 2023 Martin Brudermulle announced plans to hugely downsize European operations and move that production to China, citing high energy costs in Europe. Several sites in Germany were closed with the loss of 2,600 jobs. And BASF are not the only company looking east. Net zero is great news, for China. |
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Post by Dan Dare on Jun 6, 2024 16:43:15 GMT
BASF has 111,000 employees, 60% of them Europe. As the largest chemical company in the world it has almost 250 plants and it should be obvious that in any given year some of these plants will close (for a variety of reasons) while new ones will open.
As for 'hugely downsizing' in Europe the 2023 annual report lists capital expenditure plans for 2024-2027. Of the € 6 billion committed regional investment in Europe accounts for 40%, with plans to modernise facilities and increase capacity at Ludwigsburg and Antwerp, a new plant in France and several more new plants in Germany to produce battery materials and components.
This is not an indication of a company that is leaving or 'looking East' but one which is investing in change for the future.
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Post by Baron von Lotsov on Jun 6, 2024 18:25:37 GMT
There's little point in driving prices down by allowing completely open tariff-free access to UK market for Chinese goods if by so doing you drive down local wages at the same time. In order to afford Chinese stuff, no matter how cheap, British consumers need have jobs and earn enough by exporting stuff of their own. This is Macroeconomics 101. I corrected you on a point about Hungary's foreign investment. {/i]
While it is true that in 2023 Chinese investment in Hungary accounted for 44% of Chinese FDI into the EU, overall Chinese FDI was lower in 2023 than in 2010. And at a paltry €6.8 billion in 2023 that was less than a seventh of the investment in 2016. Add to that that the bulk of investment was in two battery plants it highly this was a one-off event unlikely to be repeated in future years. In the scheme of things Orban's love affair with Xi is mice-nuts.
I thought you already knew why BASF etc are leaving. I'd already hinted at it in a previous post where I said Germany got its industry to where it did by cheap energy from Russia. German energy is now the most expensive so they can't make a profit in Germany. BASF take in raw materials and produce chemicals which are then used in factory production. China is the world's manufacturer so it makes sense to be close to your customers.
You claim that because BASF is investing in a JV in China it is 'leaving' but don't make a similar claim for CATL and its battery plant in Hungary. Why's that?
Anyway, rather that slag off my solutions, do you have any better ideas what we should do? Just dismissing others ideas without your own solutions is weak.
I've already presented a better idea but you have chosen to ignore it.
What competition does is it weeds out the useless and it is the useless who cause people to work all week and not afford to eat and heat, as the slogan goes. You will not get rich by restricting commerce. It will make you poor.
Anyway, just a general point here. I have heard it week in and week out on this forum of how shit Chinese products are, but at the same time we are now being told they are so good that none of the Brits will be able to match them. So which is it?
Lets suppose they are better than the Brit's abilities in terms of value for money. Sure it would destroy a load of rip-off Brit firms. It is what happens after that which is when things turn around. When faced with stiff competition the Brits then realise they need to buck their ideas up and learn proper science at university and reduce the amount they are on the piss. I was listening to some PhDer on the radio today in fact who had done a PhD in water sewerage. The stupid bitch took about ten minutes of speiling out the blatantly obvious until she finally said the problem is we are running at over capacity! It really won't do any more to carry on as we are, making these idiots believe they are something special when shielded from competition and smart people. Anyway, there was a time China itself was at the bottom of a very tall mountain to climb around the 70s period. They worked hard. That's how they got out of a deep economic hole.
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Post by Dan Dare on Jun 6, 2024 18:34:54 GMT
As you ought to be aware by now I consider the UK to be very much a lost cause. I'm more concerned about the prospects for Europe as a whole.
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Post by Baron von Lotsov on Jun 6, 2024 19:04:09 GMT
As you ought to be aware by now I consider the UK to be very much a lost cause. I'm more concerned about the prospects for Europe as a whole. Well if you want an up to date commentary on this with full sets of figures and so on you should listen to this.
The situation is complicated and here we have an analysis of tariffs on Chinese EVs by the EU and the reaction from China plus the shaky issue of Airbus.
If the UK resists the US demands to follow then I believe it would create lots of jobs for the UK. The Indians at Tata would go bust and their factories could be bought by Chinese firms for final assembly. We only get a slither of the cake, but the cake is a big one. We should not be blown about by US demands, but rather we should have a stable approach so there are no surprises. We can no longer be forced by the EU, so if our trade policies are open and remain open then that will be a big reason why successful foreign firms like BYD set things up here rather than the EU. If we only see a small fraction of EU-China business migrate to the UK, we would be very rich by it, given the EU is a large place. China can't be dealing with countries who change their position at a drop of a hat. A factory is a big and long-term commitment. We already lost a one billion investment in Cambridge into a photonics research lab because of dicks like Duncan Smith and Raab etc.
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Post by Dan Dare on Jun 7, 2024 8:50:33 GMT
You appear to assume that if the UK adopts a trade policy that facilitates an invasion of Chinese screwdriver plants the EU will not impose tariffs on exports from those plants. Wishful thinking. As for your video, I did watch it and discount the basic message that US and EU sanctions will not be effective and lead to Chinese retaliation. The only meaningful example of such retaliation mentioned was the possibility of China not going ahead with the purchase of 100 Airbus widebody planes (A330neo). Hardly likely, I should have thought. If the Chinese really need such aircraft, where are they going to get them from? Comac? That's a joke. Boeing? Hardly likely given current US politics. As for Airbus, it has a current backlog of 6,900 aircraft so Chinese retaliation would be a minor problem for them. The other potential area of conflict/retaliation was battery production. The vlogger rightly noted that China has a virtual monopoly in this area and a refusal to supply the EU market would cripple the EU market for electric vehicles. Perhaps so, but he also stated that the EU could build its own battery capability for an investment of $98 billion. For a $17 trillion economy that would be a challenge but doable if this industrial sector were seen as a strategic priority. As it probably is. It's obvious that China's options in a tariff war are very limited since they will be the losers in any such war, being crucially dependent on exports to the EU and North America.
Edit: Airbus order backlog was 8,600 as of 31.12.23
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Post by Baron von Lotsov on Jun 7, 2024 10:53:09 GMT
You appear to assume that if the UK adopts a trade policy that facilitates an invasion of Chinese screwdriver plants the EU will not impose tariffs on exports from those plants. Wishful thinking. As for your video, I did watch it and discount the basic message that US and EU sanctions will not be effective and lead to Chinese retaliation. The only meaningful example of such retaliation mentioned was the possibility of China not going ahead with the purchase of 100 Airbus widebody planes (A330neo). Hardly likely, I should have thought. If the Chinese really need such aircraft, where are they going to get them from? Comac? That's a joke. Boeing? Hardly likely given current US politics. As for Airbus, it has a current backlog of 6,900 aircraft so Chinese retaliation would be a minor problem for them. The other potential area of conflict/retaliation was battery production. The vlogger rightly noted that China has a virtual monopoly in this area and a refusal to supply the EU market would cripple the EU market for electric vehicles. Perhaps so, but he also stated that the EU could build its own battery capability for an investment of $98 billion. For a $17 trillion economy that would be a challenge but doable if this industrial sector were seen as a strategic priority. As it probably is. It's obvious that China's options in a tariff war are very limited since they will be the losers in any such war, being crucially dependent on exports to the EU and North America.
Edit: Airbus order backlog was 8,600 as of 31.12.23
I see Airbus a bit like the chips market. Airbus has a huge market opportunity presented to it where it could sell thousands of aircraft and could perhaps double in size. This is after a lot of government investment going back many decades, so the long-term is just starting to pay off high returns, but because the EU is dictated to by the US it would rather keep its current masters happy than go it alone and play a competitive game.
Over in China the attitude appears to be that where Western firms are producing a better product than they produce, they are happy to buy all they need from them as long as it is a fair price and they are treated with respect. China never set out to replace every industry on earth as it sees that Jack of all trades is master at none, so China would rather go balls out in the industries it does and sell a good product and then see the reciprocal relationship with their Western partners so as to maintain a healthy economy and some sort of balance of trade. We see this with Britain. China actually thinks we do football well and enjoys our football, and China drinks Scotch whisky and appreciates the many years it has taken to refine the product to what it is now and has no plans to make its own.
This was also the case with aircraft and microchips. With microchips China bought $400m a year of them from the US, which is a huge earner for the US when you factor in the millions of firms that support the manufacturing process, e.g. firms like Applied Materials. The Western powers regarding chip sanctions were somewhat like you are talking when mentioning Comac. ASML's now retired boss recently said if we gave China all the instructions on how to build one of our machines they would still not manage it, hence we are sitting pretty. The old saying though is necessity is the mother of invention. China started small and made chips for things like electric lightbulbs and power adapters. They are piss easy chips to make and they made then for a few pence and brought their manufacturing costs down in these areas. The remarkable thing has been how fast they went from simple chips with perhaps 50 transistors in, all the way to parity with the most sophisticated chips (3nm) in such a short time. They did not need to retaliate with sanctions and China sees sanctions as lose-lose so plays that card as a last resort. I think also when they do sanction, they like to target, so they sanctioned Duncan-Smith. No one in China buys Duncan-smiths products so it was kind of political.
Another point is the Chinese game of Go is far more complicated than football. The overall picture I have of how the Chinese state runs, is they are playing a very strategic game with millions of nuances where we think there are two goals at either end of the field and the object is simple and understood by all. One day we could cry, oh my god, it has all gone wrong and we are fucked, but we just don't understand how it happened, as in a bit like the case of the post office. Everyone knows it screwed up, but no one can put their finger on who did it and why it happened. China is a bit like saying if you screw us, we will get you back, but we are not going to help you avoid it by telling you what we will do and why we will do it. On the other hand if you help China, China will always pay you back. I saw that with Serbia. They sent their medics over to help in Wuhan during their covid outbreak. China has just given Serbia a big golden thank you present.
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Post by Dan Dare on Jun 7, 2024 11:21:01 GMT
Why not try to argue with actual facts and figures rather than made-up nonsense and maunderings.
Nobody is interested in how you 'see' Airbus or, for that matter the chip market.
Just give us the facts not unsubstantiated opinion and supposition. Your present posting style is extremely tedious and tiresome and explains why few here try to engage with you.
Before pressing submit you need to review and cut the text by at least half. And then by half again, making sure your claims and opinions are supported by expert opinion and credible links, preferably not Chinese.
Hope this helps.
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Post by Baron von Lotsov on Jun 8, 2024 1:09:33 GMT
Why not try to argue with actual facts and figures rather than made-up nonsense and maunderings. Nobody is interested in how you 'see' Airbus or, for that matter the chip market. Just give us the facts not unsubstantiated opinion and supposition. Your present posting style is extremely tedious and tiresome and explains why few here try to engage with you. Before pressing submit you need to review and cut the text by at least half. And then by half again, making sure your claims and opinions are supported by expert opinion and credible links, preferably not Chinese. Hope this helps. I'm explaining, not arguing. I have more sophisticated ways of thinking than you, hence it takes longer to describe. By the way, which so-called experts do you believe? What are they telling you which contradicts my own research? |
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