Russia and others, move to use Yuan instead of dollar.

[karabiber]

What does this new development make for the US economy and the US dollar in the coming days and years to come.[/b]
Give your personal opinion on this development!

I think the primary reason for Russia to consider accepting Chinese currency Yuan for international transactions of its oil sales, is to bypass US financial system and reduce its vulnerability to Economic sanction imposed following the Ukraine war. It can provide an alternative avenue for conducting business and lessen the impact of sanctions. Secondly, it can help Russia to diversify its foreign exchange reserves which are currently heavily weighted towards US dollar and Euro. By doing so Russia can mitigate the impact of fluctuations of these currencies on its economy.

It is almost impossible to destroy the dominance of the ABD Dollar. Russia and China which are opposite the NATO Bloc, can make an agreement between them and trade in Yuan and they have already implemented this. It is also quite impossible for Russia to sell energy, which is one of the biggest sources of income in exchange for Yuan. There is no dominance of national currencies in world trade. Because countries are not self-sufficient as before and they need US Dollars for foreign trade. If Russia makes its energy exports by buying Yuan, it may enter into a payments crisis. This is because most of their income will be in Yuan and their payments will be in US Dollars. First of all, it is necessary to reduce the dependence on the US Dollar over time in order to end this order and this is a process that will take many years.

[DrBeer]

^^^ You assume that China has a deep love affair with US Dollar. Then why they are offloading a part of their reserves in US treasury bonds? Why they have given their approval for the common BRICS currency, which as CNY having the highest weightage? China is trying to move away from USD and there is no confusion related to this. But they are intelligent enough to understand that doing so takes a lot of time and it can't be done in a fortnight. And also, even for trade using CNY/RUR, values are first calculated in USD and then converted to the other currency.

Here everything is very simple.
1. You can neither prove nor deny any information about China's foreign exchange reserves, including the amount of treasury bills. China has CLOSED and CLOSED this data. The data released to the public is sometimes very vague and cannot be used to get a complete picture.
2. China sells most of its most demanded goods - ONLY FOR THE DOLLAR !
3. China's economy, as much as you don't like it, is totally dependent on Western technology. No - China can produce its own consumer goods. But competitive goods with high added value. china cannot produce without western technology ! That's why, after the migration of Western technology from China has begun, China is hysterically looking for a way out, including through "pressure and agreement. This is what I mean: From August 1, 2023, gallium and germanium, as well as their chemical compounds, will be subject to export controls. According to the Chinese side, the measure is aimed at protecting national security. But at the same time China says - if you don't take technology out of China - we will lift these restrictions ! By the way China sells gallium and germanium ONLY for dollars
4. Regarding the fantasy about "NY/RUR values are first calculated in US dollars and then converted to another currency". On the one hand it seems to be true. But the nuances, which you always forget about for some reason
On the example of oil bought by India for rupees. Urals, on the market for $50+. India gets a huge discount. The total dollar value of a barrel is approximately $35. Everything seems to be fine. But this is not how calculations are made
Firstly, for inter-state settlements India uses a very specific cross-rate, which is calculated through the chain rupee-dollar-ruble, taking into account the risks of the ruble; as a result Russia loses another 3-5%.
H u i fnal - part of the money is blocked in accounts in Indian banks, and the part that actually ends up in Russia - you can only buy "bananas" conditionally with them, and the question of exchanging rupees for dollars is not even considered. Do you think that China is stupider than India in "undressing" Russia?  It's exactly the same picture there....

[be.open]

^^^ You assume that China has a deep love affair with US Dollar. Then why they are offloading a part of their reserves in US treasury bonds? Why they have given their approval for the common BRICS currency, which as CNY having the highest weightage? China is trying to move away from USD and there is no confusion related to this. But they are intelligent enough to understand that doing so takes a lot of time and it can't be done in a fortnight. And also, even for trade using CNY/RUR, values are first calculated in USD and then converted to the other currency.

Here everything is very simple.
1. You can neither prove nor deny any information about China's foreign exchange reserves, including the amount of treasury bills. China has CLOSED and CLOSED this data. The data released to the public is sometimes very vague and cannot be used to get a complete picture.
2. China sells most of its most demanded goods - ONLY FOR THE DOLLAR !
3. China's economy, as much as you don't like it, is totally dependent on Western technology. No - China can produce its own consumer goods. But competitive goods with high added value. china cannot produce without western technology ! That's why, after the migration of Western technology from China has begun, China is hysterically looking for a way out, including through "pressure and agreement. This is what I mean: From August 1, 2023, gallium and germanium, as well as their chemical compounds, will be subject to export controls. According to the Chinese side, the measure is aimed at protecting national security. But at the same time China says - if you don't take technology out of China - we will lift these restrictions ! By the way China sells gallium and germanium ONLY for dollars
4. Regarding the fantasy about "NY/RUR values are first calculated in US dollars and then converted to another currency". On the one hand it seems to be true. But the nuances, which you always forget about for some reason
On the example of oil bought by India for rupees. Urals, on the market for $50+. India gets a huge discount. The total dollar value of a barrel is approximately $35. Everything seems to be fine. But this is not how calculations are made
Firstly, for inter-state settlements India uses a very specific cross-rate, which is calculated through the chain rupee-dollar-ruble, taking into account the risks of the ruble; as a result Russia loses another 3-5%.
H u i fnal - part of the money is blocked in accounts in Indian banks, and the part that actually ends up in Russia - you can only buy "bananas" conditionally with them, and the question of exchanging rupees for dollars is not even considered. Do you think that China is stupider than India in "undressing" Russia?  It's exactly the same picture there....

Fortunately, you can see the dynamics of China's investment in US Treasury bonds on the US Treasury website.

[pooya87]

Fortunately, you can see the dynamics of China's investment in US Treasury bonds on the US Treasury website.

That's some interesting data, thanks for the link.
I ran some analysis on it and it shows what we've been saying over the past year. A lot of countries have been abandoning US slowly but surely, some of which are in the Eastern bloc.

Amount-wise we have a total of $253 billion dollar dumped over the specified year (Jan 2022 to Jan 2023) with Japan ($195.5 billion) and China ($174.4 billion) on top as the "biggest dumpers".

Percentage-wise we have Sweden on top with 28% dump which is $15 billion. The more interesting one is the terrorist organization known as Israel that has dumped 28% of its securities and bonds worth $17.7 billion.
After that we have France (21%-$49 billion), Ireland (18%-$55.2 billion), China (17%-$174.4 billion), Thailand (15%-$9.3 billion), Korea (15%-$18 billion), Japan (15%-$195.5 billion), Vietnam (14%-$6 billion), Kuwait (14%-$7.3 billion) as the "top dumpers".

There are of course some interesting names in the list that have been trying to "pump" money into the failing US economy and some of them are the  usual suspects such as UAE that has increased its holdings by $20 billion (45%). Interestingly enough Saudi Arabia (the 51st state) that has actually dumped 7% of its holdings equal to $8.4 billion.
The biggest "pumper" position goes to Belgium with $88.1 billion bought securities and bonds (36% increase). I have to dig deeper for more reliable information but with some quick search Belgium as one of the handful of European countries with LNG terminals have increased its Russian LNG imports by a lot (nearly double). It looks like they were "taxed" by US for the increased income #cashcow

[DrBeer]

Fortunately, you can see the dynamics of China's investment in US Treasury bonds on the US Treasury website.

I know this data, I expected to see it, and I confirm - it is true
As is the truth that "China CLOSED all of its data on foreign exchange reserves. The data released to the public is sometimes very vague and cannot be used to get the full picture." You won't show data on China's foreign exchange reserves other than analysts' assumptions.

Regarding the information you cite: Yes, in 12 months, China has reduced (according to official U.S. data) about 16% of its investments in U.S. government bonds. If you do a simple operation, and compare with other countries, China is by no means the leader in terms of government bond dumping. That said, you can see that the countries are about 50/50 split between those who have reduced their holdings a bit and those who have increased them a bit.
I understand if China left 50% for the year. And so - yes there is a slight change, but it can't be called "China has abandoned U.S. government obligations and withdrawn all funds from them.

Oh, and most importantly You somehow selectively took the period, forgetting about the current date ? Coincidence?

And here is the full spreadsheet with ALL the information on the current date

https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/slt_table5.html

Tell me - what is the increase from 849.0 on 2023-02 to 868.9 on 2023-04 ? In 2 months - a 10% increase in investment ...Or is that not it, it's about another ?!

[be.open]

Fortunately, you can see the dynamics of China's investment in US Treasury bonds on the US Treasury website.

I know this data, I expected to see it, and I confirm - it is true
As is the truth that "China CLOSED all of its data on foreign exchange reserves. The data released to the public is sometimes very vague and cannot be used to get the full picture." You won't show data on China's foreign exchange reserves other than analysts' assumptions.

Regarding the information you cite: Yes, in 12 months, China has reduced (according to official U.S. data) about 16% of its investments in U.S. government bonds. If you do a simple operation, and compare with other countries, China is by no means the leader in terms of government bond dumping. That said, you can see that the countries are about 50/50 split between those who have reduced their holdings a bit and those who have increased them a bit.
I understand if China left 50% for the year. And so - yes there is a slight change, but it can't be called "China has abandoned U.S. government obligations and withdrawn all funds from them.

Oh, and most importantly You somehow selectively took the period, forgetting about the current date ? Coincidence?

And here is the full spreadsheet with ALL the information on the current date

https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/slt_table5.html

Tell me - what is the increase from 849.0 on 2023-02 to 868.9 on 2023-04 ? In 2 months - a 10% increase in investment ...Or is that not it, it's about another ?!

Dude, lol. You have very serious problems with math, if you see a 10% increase here, try using the help of a calculator.

If you look at the history of China's investment in US Treasury bonds over a longer time period, it turns out that China has been systematically reducing its investment in US government debt for about ten years, while increasing investment in gold. The maximum level of China's investments in US Treasury bonds exceeded 1.2 trillion dollars, that is, over ten years, China has reduced its investment in US government debt by about one and a half times.

[pooya87]

If you do a simple operation, and compare with other countries, China is by no means the leader in terms of government bond dumping.

China is literary the second biggest dumper after Japan dumping a massive $174.4 billion in a year as I pointed out above in details.

Tell me - what is the increase from 849.0 on 2023-02 to 868.9 on 2023-04 ? In 2 months - a 10% increase in investment ...Or is that not it, it's about another ?!

$19.9 billion in $849.0 billion is 2.34% increase not 10%!

It is an interesting short term move though, specially since overall move is still dump down from $1033.8 billion.
It could possibly be linked to the interest rate hike in the same period from 4.33% to 4.83% making this move profitable in short term. Which could also explain the stop and the small $400 million decrease on 2023-04.

[DrBeer]

Dude, lol. You have very serious problems with math, if you see a 10% increase here, try using the help of a calculator.

If you look at the history of China's investment in US Treasury bonds over a longer time period, it turns out that China has been systematically reducing its investment in US government debt for about ten years, while increasing investment in gold. The maximum level of China's investments in US Treasury bonds exceeded 1.2 trillion dollars, that is, over ten years, China has reduced its investment in US government debt by about one and a half times.

...
$19.9 billion in $849.0 billion is 2.34% increase not 10%!
It is an interesting short term move though, specially since overall move is still dump down from $1033.8 billion.
It could possibly be linked to the interest rate hike in the same period from 4.33% to 4.83% making this move profitable in short term. Which could also explain the stop and the small $400 million decrease on 2023-04.

You guys are beautiful ! This was done on purpose, so that you yourself checked the glaring error, and you yourself wrote that the period that you specified - was deliberately "cut" not to show the growth, and then you yourself confirm that the growth is "but in the figure error" !
Thank you for the clarification, you did it perfectly !
Yes, 2 and a small percentage, in two months. And look at the dynamics of "China's rejection of U.S. government bonds" in the period you intentionally chose - virtually identical figures! Thank you again for your accuracy

So, back to the topic, is it still "China's global rejection of US bonds", or is the market situation due to many problems in the world economy, when small parts of the "eggs" are shifted to other baskets ? As you noticed - a noticeable downturn started to show up in 2021-2022. Shall I tell you about the causes and situation of the world economy ? No ? As you can see - the overall picture shows some decline in investment by other countries in the U.S. papers. And it's quite logical, based on the situation in the economy, the next round of "just look at what state debt, there will definitely be a default". Now the situation has stabilized, and the situation begins to change the vector. Countries have started to return money to U.S. government bonds

[stompix]

Doomsayers cult two years ago:
China is holding all of US debt, US is owned by China, Us puppet of China, US bankrupt
Doomsayers cult now:
China is dumping all of US debt, China no longer holds US debt, US is bankrupt!

Going over the obvious lack of knowledge of what those bonds actually are and what purpose they serve here is a really hard pill for you to swallow:

According to data from the US Department of the Treasury, China's holdings of US agency bonds — bonds issued by US government-sponsored agencies like mortgage buyer Freddie Mac — stood at $259.99 billion as of January, up by $55.3 billion, or 27 percent, from a year ago.

Simply said, China is just converting treasury bonds to us agency ones because they are offering higher yields.

Experts said a key driver of China's rising holdings of US agency debt was its higher yield over US Treasuries.

A recent Bloomberg report said that the US agency bonds' yield premium over US Treasuries has widened over the past year, with the option-adjusted spread between US agency bonds and Treasuries increasing to about 28 basis points as of mid-February, up from about 15 basis points a year ago.

Oh, and I'm sure every single one of you is going to label this as fake news, even if it comes from the official paper of the CCP.

Meanwhile, how are BRICS currencies doing?
If the USD is dying, why are the BRICS currencies going lower against it?



I would have mentioned also the Iranian rial but that thing went down so bad it's destroying every graphic like the Zimbabwe dollar.

[Mame89]

Give your personal opinion on this development!

Personal opinion, this step should have been implemented by pacific countries or developing countries for a long time to escape the pressure of the dollar. just remember how George Soros could destroy the countries of Southeast Asia with his cunning tricks. countries should not depend on just one currency for transactions in various countries.

And this is one way to reduce America's domination and hegemony in the world. because America has too often behaved and acted beyond limits and arbitrarily towards other countries that are not in line with it. The Chinese Yuan is slowly but surely being used by the countries of Russia, Iran, Saudi Arabia, the UAE, the Middle East, Indonesia, the African continent etc. That way the dominance of the US Dollar will begin to diminish, this will definitely happen although we don't know when it will work.

[pooya87]

You guys are beautiful ! This was done on purpose, so that you yourself checked the glaring error, and you yourself wrote that the period that you specified - was deliberately "cut" not to show the growth, and then you yourself confirm that the growth is "but in the figure error" !

Growth? Maybe a picture can help you see this "growth" better.


I don't see "growth" in this year long trend, more like a dead cat bounce. It has to go back to near $1000 billion for it to be called "growth".

This actually looks somewhat like the bitcoin price situation. It has massively crashed down from $70k and has only recently recovered to $30k. We can't say it has "grown" and things are fine until at least we see $50k+. Of course if you zoom in, it would look like "growth"!

So, back to the topic, is it still "China's global rejection of US bonds",

That's your statement not others. China never "rejected" US bonds, they dumped it because they wanted to reduce the amount of risk they were taking since US dollar started tanking (crash postponed by hugely increasing interest rates) and US-China are practically in an economic war. This is also not the only thing they did. They've been pulling out of each other's markets for the past couple of years. For example in the most recent news Apple revealed plans to pull a big part of its production out of China and move it to India.

[Synchronice]

That's your statement not others. China never "rejected" US bonds, they dumped it because they wanted to reduce the amount of risk they were taking since US dollar started tanking (crash postponed by hugely increasing interest rates) and US-China are practically in an economic war. This is also not the only thing they did. They've been pulling out of each other's markets for the past couple of years. For example in the most recent news Apple revealed plans to pull a big part of its production out of China and move it to India.

There is a thing that I don't understand. Some years ago I remember Apple or Barak Obama stated that Apple couldn't move factories from China to other country because Chinese laborers were highly qualified, efficient and fast. So, I don't really understand, if America is so dependent on China, why does China heavily invests in U.S. Treasury bonds and makes its own currency weak to keep low export fees? It could profit more if the USA is really dependent on China.
And there is another thing that I personally think is a huge bullshit. Why doesn't America produces goods in the USA? Labor is expensive? Then they shouldn't produce food, shouldn't provide postal service, shouldn't do tons of thing if we think that way. And labor isn't that cheap in China too. I think they are just exploiting their employees and they wont' be able to do the same in the USA. Or may be? Idk, I have heard that Amazon exploits its warehouse and delivery employees too.

[be.open]

That's your statement not others. China never "rejected" US bonds, they dumped it because they wanted to reduce the amount of risk they were taking since US dollar started tanking (crash postponed by hugely increasing interest rates) and US-China are practically in an economic war. This is also not the only thing they did. They've been pulling out of each other's markets for the past couple of years. For example in the most recent news Apple revealed plans to pull a big part of its production out of China and move it to India.

There is a thing that I don't understand. Some years ago I remember Apple or Barak Obama stated that Apple couldn't move factories from China to other country because Chinese laborers were highly qualified, efficient and fast. So, I don't really understand, if America is so dependent on China, why does China heavily invests in U.S. Treasury bonds and makes its own currency weak to keep low export fees? It could profit more if the USA is really dependent on China.
And there is another thing that I personally think is a huge bullshit. Why doesn't America produces goods in the USA? Labor is expensive? Then they shouldn't produce food, shouldn't provide postal service, shouldn't do tons of thing if we think that way. And labor isn't that cheap in China too. I think they are just exploiting their employees and they wont' be able to do the same in the USA. Or may be? Idk, I have heard that Amazon exploits its warehouse and delivery employees too.

1. China has an export-oriented economy, that is, China has a positive trade balance. In such conditions, it is beneficial for China to artificially maintain a low exchange rate of the yuan.
2. China is actually a monopolist in the production of a large number of rare earth metals, which are actively used in any high-tech products. This is a strong trump card of China and the answer to the question why it is difficult for any large company to transfer production from China to any other place.

[DrBeer]

That's your statement not others. China never "rejected" US bonds, they dumped it because they wanted to reduce the amount of risk they were taking since US dollar started tanking (crash postponed by hugely increasing interest rates) and US-China are practically in an economic war. This is also not the only thing they did. They've been pulling out of each other's markets for the past couple of years. For example in the most recent news Apple revealed plans to pull a big part of its production out of China and move it to India.

There is a thing that I don't understand. Some years ago I remember Apple or Barak Obama stated that Apple couldn't move factories from China to other country because Chinese laborers were highly qualified, efficient and fast. So, I don't really understand, if America is so dependent on China, why does China heavily invests in U.S. Treasury bonds and makes its own currency weak to keep low export fees? It could profit more if the USA is really dependent on China.
And there is another thing that I personally think is a huge bullshit. Why doesn't America produces goods in the USA? Labor is expensive? Then they shouldn't produce food, shouldn't provide postal service, shouldn't do tons of thing if we think that way. And labor isn't that cheap in China too. I think they are just exploiting their employees and they wont' be able to do the same in the USA. Or may be? Idk, I have heard that Amazon exploits its warehouse and delivery employees too.

1. China has an export-oriented economy, that is, China has a positive trade balance. In such conditions, it is beneficial for China to artificially maintain a low exchange rate of the yuan.
2. China is actually a monopolist in the production of a large number of rare earth metals, which are actively used in any high-tech products. This is a strong trump card of China and the answer to the question why it is difficult for any large company to transfer production from China to any other place.

The reality is a little different.
China is really the leading supplier of gallium and germanium today. This is a fact, I confirm. But I highlighted the word "SUPPLIER" for a reason. The fact is that these rare earths are also mined by other countries. The advantage of China, before the introduction of "licensing", was the extremely low price. But there are deposits of these metals in other countries, and in industrial quantities, with a slightly higher price.
The countries with the largest deposits and commercial production of these metals:
Gallium - Japan, South Korea, Ukraine
Germanium - Canada, Belgium, USA

Yes, they will create a temporary inconvenience, but it's like another "fighter against the world" with "turn off gas to Europe. Remember how it ended? There were "predictions from international analysts" blaring through all the outlets - "Europe will freeze, die out and crawl on its knees". In the end, the EU quietly switched to alternative and adequate suppliers of the "unique product", and ... in the end - the EU has no problems, Russia has lost this market forever.
The same will happen with Galium and Germany - China will simply lose supply contracts, it will take some time to sign new contracts, build logistics schemes, after which China will be told "goodbye our stupid supplier

[be.open]

That's your statement not others. China never "rejected" US bonds, they dumped it because they wanted to reduce the amount of risk they were taking since US dollar started tanking (crash postponed by hugely increasing interest rates) and US-China are practically in an economic war. This is also not the only thing they did. They've been pulling out of each other's markets for the past couple of years. For example in the most recent news Apple revealed plans to pull a big part of its production out of China and move it to India.

There is a thing that I don't understand. Some years ago I remember Apple or Barak Obama stated that Apple couldn't move factories from China to other country because Chinese laborers were highly qualified, efficient and fast. So, I don't really understand, if America is so dependent on China, why does China heavily invests in U.S. Treasury bonds and makes its own currency weak to keep low export fees? It could profit more if the USA is really dependent on China.
And there is another thing that I personally think is a huge bullshit. Why doesn't America produces goods in the USA? Labor is expensive? Then they shouldn't produce food, shouldn't provide postal service, shouldn't do tons of thing if we think that way. And labor isn't that cheap in China too. I think they are just exploiting their employees and they wont' be able to do the same in the USA. Or may be? Idk, I have heard that Amazon exploits its warehouse and delivery employees too.

1. China has an export-oriented economy, that is, China has a positive trade balance. In such conditions, it is beneficial for China to artificially maintain a low exchange rate of the yuan.
2. China is actually a monopolist in the production of a large number of rare earth metals, which are actively used in any high-tech products. This is a strong trump card of China and the answer to the question why it is difficult for any large company to transfer production from China to any other place.

The reality is a little different.
China is really the leading supplier of gallium and germanium today. This is a fact, I confirm. But I highlighted the word "SUPPLIER" for a reason. The fact is that these rare earths are also mined by other countries. The advantage of China, before the introduction of "licensing", was the extremely low price. But there are deposits of these metals in other countries, and in industrial quantities, with a slightly higher price.
The countries with the largest deposits and commercial production of these metals:
Gallium - Japan, South Korea, Ukraine
Germanium - Canada, Belgium, USA

Yes, they will create a temporary inconvenience, but it's like another "fighter against the world" with "turn off gas to Europe. Remember how it ended? There were "predictions from international analysts" blaring through all the outlets - "Europe will freeze, die out and crawl on its knees". In the end, the EU quietly switched to alternative and adequate suppliers of the "unique product", and ... in the end - the EU has no problems, Russia has lost this market forever.
The same will happen with Galium and Germany - China will simply lose supply contracts, it will take some time to sign new contracts, build logistics schemes, after which China will be told "goodbye our stupid supplier

China made a far-sighted bet on rare earths in the 1980s. Today, China is the world leader in the supply of 17 different rare earth metals with a market share of about 90%. To capture a significant share of this market requires huge investments and years, if not decades of directed efforts. The irony is that rare earth metals, which are actively used in high-tech goods, including for the green transition, are extremely unfriendly in their production, so replacing China on the world market is not only long and expensive, but also very dirty work. The production of rare earth metals is one of the reasons why in some parts of China it is possible to make bricks from the air, it is so dirty. Want to replace China? Good luck.

[DrBeer]

That's your statement not others. China never "rejected" US bonds, they dumped it because they wanted to reduce the amount of risk they were taking since US dollar started tanking (crash postponed by hugely increasing interest rates) and US-China are practically in an economic war. This is also not the only thing they did. They've been pulling out of each other's markets for the past couple of years. For example in the most recent news Apple revealed plans to pull a big part of its production out of China and move it to India.

There is a thing that I don't understand. Some years ago I remember Apple or Barak Obama stated that Apple couldn't move factories from China to other country because Chinese laborers were highly qualified, efficient and fast. So, I don't really understand, if America is so dependent on China, why does China heavily invests in U.S. Treasury bonds and makes its own currency weak to keep low export fees? It could profit more if the USA is really dependent on China.
And there is another thing that I personally think is a huge bullshit. Why doesn't America produces goods in the USA? Labor is expensive? Then they shouldn't produce food, shouldn't provide postal service, shouldn't do tons of thing if we think that way. And labor isn't that cheap in China too. I think they are just exploiting their employees and they wont' be able to do the same in the USA. Or may be? Idk, I have heard that Amazon exploits its warehouse and delivery employees too.

1. China has an export-oriented economy, that is, China has a positive trade balance. In such conditions, it is beneficial for China to artificially maintain a low exchange rate of the yuan.
2. China is actually a monopolist in the production of a large number of rare earth metals, which are actively used in any high-tech products. This is a strong trump card of China and the answer to the question why it is difficult for any large company to transfer production from China to any other place.

The reality is a little different.
China is really the leading supplier of gallium and germanium today. This is a fact, I confirm. But I highlighted the word "SUPPLIER" for a reason. The fact is that these rare earths are also mined by other countries. The advantage of China, before the introduction of "licensing", was the extremely low price. But there are deposits of these metals in other countries, and in industrial quantities, with a slightly higher price.
The countries with the largest deposits and commercial production of these metals:
Gallium - Japan, South Korea, Ukraine
Germanium - Canada, Belgium, USA

Yes, they will create a temporary inconvenience, but it's like another "fighter against the world" with "turn off gas to Europe. Remember how it ended? There were "predictions from international analysts" blaring through all the outlets - "Europe will freeze, die out and crawl on its knees". In the end, the EU quietly switched to alternative and adequate suppliers of the "unique product", and ... in the end - the EU has no problems, Russia has lost this market forever.
The same will happen with Galium and Germany - China will simply lose supply contracts, it will take some time to sign new contracts, build logistics schemes, after which China will be told "goodbye our stupid supplier

China made a far-sighted bet on rare earths in the 1980s. Today, China is the world leader in the supply of 17 different rare earth metals with a market share of about 90%. To capture a significant share of this market requires huge investments and years, if not decades of directed efforts. The irony is that rare earth metals, which are actively used in high-tech goods, including for the green transition, are extremely unfriendly in their production, so replacing China on the world market is not only long and expensive, but also very dirty work. The production of rare earth metals is one of the reasons why in some parts of China it is possible to make bricks from the air, it is so dirty. Want to replace China? Good luck.

Let's start with a theory, shall we?
Rare earth metals are a group of 17 elements including scandium, yttrium and the lanthanoids (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium).
Galium and Germanium are not included.
What I agree with, and it is foolish to deny - China is the largest supplier of rare earth metals today. But not EXCLUSIVE.
You can read in open sources, about deposits and mining of this group of metals in the world. Note that until 2000, the leader in mining and production of rare earth metals was the USA.
There are also large deposits in Australia, India, Brazil, India, as well as other countries.
The above-mentioned "problem" concerns only 2 metals - gallium and germanium. But as you know - their production in other countries has been reduced, but not stopped. It was just logical because China started to supply a lot of these metals to the market cheaply. Now other countries will start to increase production of these metals, because there is demand, and there are "restrictions" from China.
In a word - there will be a small adaptation of the market, as a result of which - new and old suppliers will simply appear on the market, with prices a bit higher than Chinese prices. Let me remind you once again - without being a really exclusive producer of some goods on the market, it is foolish to make such steps. China apparently has not studied Russia's experience of economic terrorization of consumers, and may repeat its history in another segment of the resource economy.


PS Regarding dirty air, I also agree. But there are nuances China has never cared about ecology and public health, so they did not use quality technologies to ensure environmental safety...

[Wildwest]

The Chinese yuan has become a big competition for the US dollar, especially a big country like Russia is a country that is very influential in economic problems, so in the future the dollar will share profits with the Chinese yuan because the use of the two currencies has been divided, and currently Russia has sanctions imposed by the US state so the Chinese yuan is their way out in dealing with these problems, China is indeed a country that has great ambitions in developing their economy.

[ringgo96]

with the existence of the digital yuan, Russia has felt leha from sanctions imposed by the US, so now they have used the Chinese yuan and this will be a new threat to the US dollar which used to dominate the world market, so this is one of the ways China develops their economy and we all know that China always competes with economic problems especially in technology, And for military matters, they can't be first yet.

[DrBeer]

The Chinese yuan has become a big competition for the US dollar, especially a big country like Russia is a country that is very influential in economic problems, so in the future the dollar will share profits with the Chinese yuan because the use of the two currencies has been divided, and currently Russia has sanctions imposed by the US state so the Chinese yuan is their way out in dealing with these problems, China is indeed a country that has great ambitions in developing their economy.

And you can give facts and arguments that the cheapening yuan, in a country with a real huge internal problem with the economy, and total dependence on the market in the West, and on Western technology, poses any danger to the dollar ?
You probably don't have all the information. I will inform you. After the global crisis (COVID, economic crisis 2019-2022), China has RECOVENED, and began to INCREASE investments in US government bonds, and fill the budget with dollars. By the way, the most interesting thing is about dollars. China is forcing all its "friends" to abandon the dollar (the currency of the international world market) and switch to yuan. But the most interesting thing is that China is implementing a scheme - now we are "friends" for you, we buy for dollars everything you need on the foreign market, and you pay us for it - with your assets, cheap raw materials, let Chinese business into your economy on the most favorable terms. Well, how to buy on the world market, if "foolish friends" remove the dollar from their gold reserves and exchange it for yuan ?
And then China sells the assets of "not smart friends" to the foreign market for.... yes yes, you guessed it - FOR DOLLARS, but much more expensive than they bought them for yuan from "fools". As they say - nothing personal - just business...on fools

[jasonjm]

This is what could be referred to in international politics as power tussle in terms of international levels of analysis. Haven such two conflicting countries like China and Russia coming together based on mutual economic interest against a common rival the USA is one that could be very frustrating for the US dollar with the unambiguous leverage and advantage the likes of Russia, China, Iran and Saudi Arabia have come together to give to the Chinese Yuan. With Russia in the forefront bent on the use of the Chinese Yuan instead of the US dollar in their country and in all of it's transactions and trades settlements with Latin America, Africa and Asia countries.
https://www.wsj.com/articles/russia-turns-to-chinas-yuan-in-effort-to-ditch-the-dollar-a8111457

What does this new development make for the US economy and the US dollar in the coming days and years to come.
Give your personal opinion on this development!

BRICS countries are planning to launch a currency to trade among themselves and with other countries, but at the moment India seems unwilling for this. They are doing this to challenge the monopoly of USD in the near future. Arab countries are also looking to trade in Yuan and it will have a big impact on petrodollars. And we might see a devaluation of USD as it is not backed by Gold.