Globalization Phase III/Friend-shoring/Indo-Pac Economic Framework (Don’t call it TPP!!)/China/etc…

The manufacturing construction boom is pronounced after IRA and CHIPS. From @soberlook.


https://twitter.com/ddayen/status/1664650568294342656

HOLY FUCK!

Former Samsung Exec Allegedly Stole Plans for an Entire Chip Plant

Tried to give them to the Chinese.

Mexico and Canada both pass China as US’s top trading partner.

Trade with Mexico accounted for 15.4% of goods exported and imported by the US, just ahead of America's trade totals with Canada and China, which were 15.2% and 12% respectively.​

https://news.yahoo.com/mexico-replaced-china-americas-top-180301572.html

Good. Mexico and Canada are much more reliable partners with more secure supply chains with the US.

Needs moar edits

As someone who has spent more time in Vancouver than any other Canadian city it can be easy to get China and Canada confused, especially early in the morning.

Mexico is definitely getting its shit together, I'm buying more product out of there than ever before, but I do wonder what does this say about wages in Mexico vs China

It's still cheaper to ship a container of goods from Xiamen to Vancouver (USD$1200) vs a full truck from Mexico (USD $6200) although we use the port of Veracruz more now which is around USD $4000

Blame Mexico’s geography. It’s basically North America’s Afghanistan but with one good port instead of being landlocked.

I wonder how difficult it would be to establish a good port in either Peurto Vallarta or Manzanillo.

The problem isn’t building the port (in either location, AFAIK, just a matter of dredging), it’s connecting it to anywhere else with rail or wide enough roads to markets in Mexico City or the US.

Interesting question, as Mexico is a rare nation that has most of it's cities inland. So I looked it up. This source is a few years out of date, but says Manzanillo is Mexico's largest container port. They've almost doubled their port capacity in the last 12 years across the entire nation, with Manzanillo getting the lion share of the expansions. It passed Veracruz and Lazaro Cardenas.

https://www.icontainers.com/us/2018/06/12/top-5-ports-in-mexico/

Edit: Ah, here's a newer one. As of 2022. Manzanillo is still the largest, but Ensanada near the US border had moved up to #3 and Veracruz has fallen to #5.

Anyway, Mexico is in a really good place to increase it's share of wealth in the world, with manufacturing having a great value add while at the moment still remaining relatively inexpensive - far, far cheaper than China, whose labor costs have exploded. Add that to a very young demographic and if they can deal with the cartel problem (though that's going to be very hard) they could have a very prosperous 21st century.

https://www.marineinsight.com/know-more/10-major-ports-in-mexico/

China's exports drop 12.8% year over year from the most recent reporting period, May 2023.

That includes a significant leap of exports to Russia.

They definitely look like they are headed for difficult times.

https://www.dw.com/en/chinese-exports-plummet-except-to-russia/a-66209046

¡Pobre México! ¡Tan lejos de Dios y tan cerca de los Estados Unidos!

But, joke aside, yeah thanks for the stats.

Germany's first China strategy is vocal on risks, short on policy

https://www.reuters.com/world/german-cabinet-pass-china-strategy-thursday-govt-sources-2023-07-12/

Matthias Matthijs, senior fellow for Europe at CFR and associate professor of international political economy at Johns Hopkins University's School of Advanced International Studies, and Sophie Meunier, a senior research scholar at the School of Public and International Affairs at Princeton University, sit down with James M. Lindsay to discuss how the European Union has transformed its approach to economics and the implications for transatlantic relations.

Mentioned on the Podcast
Matthias Matthijs and Sophie Meunier, “Europe’s Geoeconomic Revolution,” Foreign Affairs

For an episode transcript and show notes, visit us at: https://www.cfr.org/podcasts/europes-geoeconomic-revolution-matthias-mattijs-sophie-meunier

https://podcasts.apple.com/us/podcast/the-presidents-inbox/id1172546141?i=1000626854043

Gets into the weeds about what the European Commission would need to actually make this transition happen.

Interesting quote (paraphrasing): Germany contracted out its security to the US, its economic growth to China and its energy to Russia. Now it’s trying to figure out how to pay up.

Interesting stat: Since Brexit Germany and France have been responsible for over 76% of economic infrastructure spending (Germany the larger share) so figuring out how to pay for a new EU industrial policy won’t be easy.

Holy shit. I knew that China’s growth v the US had slowed but didn’t realize it was moving backwards. If the guest Fareed Zakaria had on today is correct China’s economy peaked at 76% the size of the US’s and is now down to 66%.

https://podcasts.apple.com/us/podcast/fareed-zakaria-gps/id377785090

That is quite a dramatic reversal and actually kinda scary.

Hopefully we can decouple/derisk in time.

China has some profound structural problems that they are "We are the party and what we say goes" ignoring.

I'm not about to listen to the entire podcast but not clear how that can be the case. Chinese growth has slowed but these are the recent numbers, and Chinese GDP growth has been higher every single year. There is nothing like that kind of collapse.
(2023 data is presumably not available yet.)

Source - pretty nifty site.



As compared with the United States:

Are those China's self-reported numbers? If so, treat with a good deal of skepticism.

How the U.S. Is Derailing China’s Influence in Africa
A U.S.-backed railway project is helping to challenge Beijing’s dominance in an unlikely country

https://www.wsj.com/world/africa/an...road-f0e23523?reflink=integratedwebview_share

Long but good read.

Yeah, they locked down the entire country for nearly the entire year, but still had positive GDP growth in 2020. Sure.

Xi has literally disappeared everyone that disagrees with him. The numbers are whatever they say the numbers are.'

In 2023, not only did China refuse to share the base data for their economy, they also cracked down hard on any corporation that shared data with the West.

https://www.reuters.com/world/white...a-that-us-is-not-seeking-decouple-2023-08-22/

China bans Intel and AMD processors in government computers