Four-fifths of China’s lost exports to the US have already found alternative markets in the second quarter, the top destinations being Southeast Asia and Europe: www.hinrichfoundation.com/research/art... @gdp1985.bsky.social #trade

In my CLM piece, I argue that PRC exporters have found new markets for ~80% of their lost exports to the US and transshipment is low. I updated those figures to include July data. The conclusion is the same. To the extent there is transshipment, it's mostly via SE Asia.

In the latest China Leadership Monitor, I offer some thoughts on China's economy in the trade war. Lots of charts! www.prcleader.org/post/changin...

China nerds, rejoice! The Relevant Organs is back and on here. Follow them for all the news you need. @relevantorgans.bsky.social

Facing U.S. tariffs, China’s exports to the U.S. are down—while exports to Southeast Asia are up. Is that trade diversion and potential transshipment? My estimate: at most 34% of the increased PRC exports to SE Asia in Q2 could reflect trade diverted from the United States.

The US and China have a new framework to de-escalate. Whether that'll be durable is unclear. What is clear is that China can and will weaponize its export dominance. We discuss what the trade war teaches us about China's economy in our new RAND Commentary. www.rand.org/pubs/comment...

I'll be on a stellar panel this evening discussing the resilience of China's economy. I'll be providing the view from Europe. With the excellent Jude Blanchette, @fraghi.bsky.social @gdp1985.bsky.social - for fans of imposter syndrome, this is not to be missed! www.rand.org/randeurope/a...

The Trump administration is trying to reindustrialize with tariffs, especially on China. But China has lessons to teach the US about industrial strategy. A new RAND Commentary with @fraghi.bsky.social and Benjamin Lenain. www.rand.org/pubs/comment...

I would interpret the US tariff exemptions primarily as an attempt to mitigate the impact on electronics and consumers more than as a signal of a US-China deal. The exempted categories cover about 22% of US imports from China. content.govdelivery.com/bulletins/gd...

Which US industries are most exposed to the China market? Looking at US majority-owned foreign affiliates, the answer is wholesale trade, computers & electronics, chemicals & pharma, autos, and semiconductors. This could matter for US-China talks and potential PRC retaliation to US tariffs.

Taiwan is nervous. With good reason. Jude Blanchette and I discuss in our new RAND Commentary. www.rand.org/pubs/comment...

China's total fiscal deficit is set to increase by at least 2 percentage points of GDP in 2025. That's maybe not the massive stimulus some wanted, but it's not small either. The question is the composition and effectiveness of the measures.

China's retaliation to the new 20% US tariffs: - 10-15% tariffs on US ag imports - 10 US firms on Unreliable Entities List - 15 US firms on export control list (Illumina maybe most affected) - No product-specific export controls Less than proportional response.

This is a strong possibility.

China/BRI nerds, does anyone know if MOFCOM expanded the countries it counts as BRI in its stats? Is there a list by year? Reported BRI projects and investment surged in 2023. Is this due to categorization?

China Econ and Trade nerds, apply to this!

I meant "slowdown" in terms of GDP growth *rates*. But if you want *absolute* GDP growth for China and the US, here you go! Whether one uses nominal growth at market exchange rates, real growth at fixed exchange rates, or nominal growth at PPP exchange rates makes a difference.

Two narratives about China's economy: - Macro weakness - Technological and industrial strength They're both true! How? The "new economy" is a small share of the overall economy. I discuss in a new RAND Commentary. www.rand.org/pubs/comment...

When in Taipei... Perfect broth. NTD 200 ($6). 😋

Excellent Baiguan piece on 🇨🇳 youth unemployment with data and stories. This reminds me of the "skills mismatch" debate after the US Great Recession. People said the problem was poor or incorrect training or education. Others said it was just a demand problem. 1/ open.substack.com/pub/baiguan/...

There's a tension between Trump's emergent desire for a clear US sphere of influence in the Americas and his opposition to those economies being integrated with the US. 🤔

Tertiary industry (services) account for most of China's GDP growth, although manufacturing increased in importance in 2024. I need to find a way to invest in China's "other" sector. It remains the tertiary industry star...

Some thoughts on e-CNY and RMB internationalization (replying to @gdp1985.bsky.social's post: bsky.app/profile/gdp1...)

This report emphasizes the importance of Gulf countries "recycling" their petrodollar surpluses. The petroyuan could end these benefits for the US, it says. But Gulf surpluses with AEs (USD bloc) were far larger in GDP terms during the heyday of the petrodollar than with China today.

This is excellent. But I'm tripping up over this. e-CNY doesn't pay interest. Users will want other RMB assets. "Smart capital controls" could work. But would foreign investors then want more RMB bonds? Cash balances are only a small part of the global capital story. asiasociety.org/policy-insti...

What's going on with China's real estate statistics? NBS reports a recovery in the real estate component of GDP in Q4 2024. But other indicators suggest continuing contraction, except a slight recovery in sales. Trying to figure out how China nailed its 5.00% GDP growth target...

What are the best research papers on Chinese industrial policy in recent years? Please send links.

Xi Jinping's single most interesting diplomatic interaction caught on video was with Justin Trudeau in 2022. Unique glimpse of Xi's approach and style in a challenging situation. This was not a favorable setting for Xi and he didn't want to actually engage, he just wanted youtu.be/4YkzzhI2EoI

UPDATE: Today is my first day at RAND's new China Research Center. I look forward to working with Jude Blanchette to expand RAND's research into new areas, especially relating to China's economy and US-China economic competition.

Just published an article that is, unusually, not mainly about maps. I've been working on a book on this subject for many years-- Naval History was kind enough to publish this piece on one aspect of the story of Alexander Macomb Mason. And there are still a few maps. www.usni.org/magazines/na...

This was Caturday

I'd like to get an EV. But I live in DC. Seems like charging EVs in cities isn't practical and that the "home chargers" I'm reading about assume you live in the suburbs. Sad.

Amazing

The military dimension can't be ignored. If the US defends Taiwan, the econ disruptions will be automatic and sanctions will be politically inevitable. If the US doesn't defend Taiwan, it's not clear why the US should/could lead some anti China economic coalition. www.nytimes.com/2024/12/31/o...

Beach reading

There are no DC bakeries on this list. But that's because Tatte has 14 (going on 40) locations in the area and they'd have to divide the points. If any of these artisanal bakeries moves in on DC, Tatte will crush them. "Croissant quantity has a quality all its own." www.nytimes.com/article/best...

We are delighted to announce the launch of a major new initiative which draws on the approach of the Penn Project in convening, over the next 2 years, leading next generation scholars and experts on China from throughout the Asia-Pacific region. Announcement here: bit.ly/41GUPvh

🚨Today is my last day at Bloomberg. Our GeoEcon team has done fantastic work, with more to come. Bloomberg is a wonderful company, with some of the best journalists, economists, and analysts around. I'm taking the holidays off before my next analytic adventure... 🇺🇸🇨🇳📊💱

It was a pleasure to join @kaiserkuo.bsky.social on his podcast to talk about my research! I’ve been a long time lister and really enjoyed the conversation!

I guess the US hasn't been a great naval power since WW2 then... The US only had a comparatively large commercial shipbuilding sector during the war. It hasn't had a large market share since. I wrote about this in April. blinks.bloomberg.com/news/stories... 1/

Yes. And they should open a DTF in DC. It's a strategic necessity. I've been saying this for literally years. ec.ltn.com.tw/amp/article/...

There's a high bar for concluding that a specific work has influenced Xi because there's so little credible information about his thought process. For example, this op-ed takes official media statements about Xi at face value, when they should instead be thought of www.nytimes.com/2024/12/15/o...

As commanded by @gdp1985.bsky.social. A new variant, free of national borders. Ready for your geoeconomic scribblings. Ready to print at standard 18x24 size. Open to debates about what to put in the long horizontal at top.

Almost done with this on Audible. Summary: "[x] attacked [y] with [numerical advantage/no reserves] and suffered [awful/catastrophic/irreplaceable] losses for a gain of [10 km/100 m/nothing]." That 50x. Plus a handful of actual breakthroughs over 4 years. But more movement than the Western front!

Imposing export controls on commodities without allies is hard. There are limits to what export controls can do, particularly if the country doesn't control the IP or have overseas enforcement capacity. Markets find a way. China will learn this.

China's top economic tasks for 2025: 1. Boost consumption and improve investment efficiency to expand domestic demand. 2. Lead new productive forces with tech innovation and build a modern industrial system (industrial policy). 3. Advance economic reforms. www.news.cn/politics/lea...

This week on the Sinica Podcast, I chat with the brilliant @ilariamazzocco.bsky.social of @csis.org about her extensive work on the Chinese EV sector and industrial policy. Listen here: www.sinicapodcast.com/p/chinas-ev-...

An artsy submission for Caturday.

🍿

David Perdue, Trump's designated Ambassador to China, seems like a standard, old-school Republican. On the other hand, this piece he wrote in Sept is pretty aggressive. But I interpret that as his petition for the job, not necessarily what he believes. www.washingtonexaminer.com/magazine-fea...