Chapter 716: What I See Is an Opportunity

The discussion was still going on, and a staff member quietly walked up to the host and handed over a note.

After looking at the note, the host said, Chairman Li mentioned the possibility of large-scale quantitative easing in the United States. I would like to ask experts, if this possibility occurs, what will happen to our country's economy? What kind of impact?

The host asked this question only after receiving the note. Obviously, this question was not asked by the host, but by the people listening in the audience. And the only ones who could pass the note to the host were the leaders of those few ministries and commissions.

Obviously, the decision-making department wants to know what the consequences will be after the United States implements quantitative easing.

If the Financial Rescue Act can really restore the U.S. economy, then for all countries in the world, it will be business as usual, everyone will act according to the previous economic order, and the decision-making department will not need to study and introduce new policies.

But if it is true as Li Weidong said, the United States will carry out large-scale quantitative easing, which will definitely have an impact on the world economy, and as a decision-making department, it also needs to introduce countermeasures.

So for the ministerial leaders participating in the forum, they would like to hear different possibilities. If it is business as usual, then there is no need to listen to these economists beeping.

The topic of quantitative easing came up temporarily, and several economists obviously did not prepare in advance, but to become an expert, after all, they have a certain level, and they can fool a few words on the spot.

I only heard Professor Huang say: Quantitative easing means that the currency will be released. The increase in currency in the market will inevitably lead to the depreciation of the currency. That is to say, if the United States implements large-scale quantitative easing, the dollar will inevitably depreciate.

And this means that other currencies will appreciate against the US dollar. If the RMB appreciates against the U.S. dollar, it will inevitably affect our country's exports, and the specific situation depends on the depreciation of the U.S. dollar.

Hearing that quantitative easing will affect exports, many people at the scene showed nervous expressions.

Professor Sun said: Let me add Professor Huang, if the US dollar depreciates, other countries are likely to learn from the United States and carry out quantitative easing in order to stabilize the exchange rate. At that time, everyone will form a situation where everyone releases money together, which is inevitable. It will cause global inflation.

Both professors gave relatively pessimistic answers, and the microphone was in the hands of Dean Cai.

I just heard Dean Cai say: Let me talk about the impact of quantitative easing in the United States from the perspective of currency! When the dollar depreciates due to quantitative easing,

In addition to quantitative easing, other countries can also stabilize their exchange rates by holding more dollars.

If more people hold U.S. dollars, there will be fewer U.S. dollars on the market, and the exchange rate of U.S. dollars will naturally rise. As the main trade currency, the U.S. dollar is also the most important foreign exchange reserve of countries in the world, so holding more U.S. dollars is not a problem for countries in the world.

But this is equivalent to other countries absorbing the excess currency issued by the US quantitative easing, and it is also equivalent to the US passing on inflation to those countries that hold US dollars. And if these countries want to obtain US dollars, they must exchange their commodities. This is equivalent to the Federal Reserve starting the money printing machine and exchanging commodities from other countries for Americans to use.

The U.S. dollars held by various countries cannot generate income in the treasury, but will shrink due to the depreciation of the U.S. dollar. Therefore, buying U.S. bonds will become the safest way to preserve the value of U.S. dollar assets. The United States also sold U.S. bonds to allow dollars to flow back to the United States.

This also means that the U.S. dollar has traveled around the world and then returned to the United States. At the same time, the United States has also received the goods provided by the world. Countries around the world are tantamount to lending money to the United States to allow Americans to carry out various consumptions. Even goods sold to the United States are more like credit than sale!

In 2008, the concept of dollar hegemony harvesting the wealth of the world was not yet well known. The set of theories mentioned by Dean Cai is still very new to many people.

But freshness is freshness, and everyone in the conference room couldn't help frowning after hearing this set of theories. Before, everyone thought that selling things to Americans was earning their dollars and earning foreign exchange through export.

Now, after listening to Dean Cai’s analysis, I dare say that someone printed a bunch of paper and exchanged their own products, and finally they took back the printed paper. After working hard for a long time, I got a credit account! It's so heartbreaking!

The host finally looked at Li Weidong: Chairman Li, you were the first to bring up the possibility of quantitative easing just now, so what is your opinion on quantitative easing?

Li Weidong picked up the microphone: The views of the three experts just now are all correct, and I agree with them very much. However, I am in a business, so I am still used to viewing and analyzing problems from the perspective of the real industrial structure. So my views are not like the three experts. Experts are so pessimistic.

In my opinion, if the United States implements quantitative easing, it may not be a bad thing for our country's enterprises. What I see is an opportunity, an opportunity for industrial upgrading!

Here we must first clarify that if the United States implements quantitative easing, the excess currency will flow into the market in what form. Is it through investment? trading? Financial system? Social Welfare? Or is it sending money directly to the people?

Just like the financial rescue bill proposed by the US government this time, it is to buy derivatives of subprime loans, but who is holding these derivatives of subprime loans? Obviously financial institutions. In other words, the money flows directly into financial institutions.

The financial institutions get the money and the only thing they use it for is to invest it. But now the United States is facing a financial crisis, the financial industry is struggling, and the real economy is shrinking. Are there any areas worth investing in?

In addition to the United States, developed countries such as Europe and Japan have also been affected by the financial crisis. As far as I know, the sovereign debt of some European countries has already experienced problems, and it is definitely not a good place for investment.

Other regions, such as Africa, South America, and India, have always been the sphere of influence of Western countries. If Western capitals were willing to invest in these places, they would have gone there long ago, and there is no need to wait until now.

So I think there is only one place where Western capital investment can invest, and that is China. If the United States implements quantitative easing, a large amount of funds will inevitably flow into China, and because our financial system has strict restrictions on foreign investment, this fund will inevitably enter our real economy.

This is of course a rare opportunity for us, and what we have to do is to make full use of this opportunity to open up overseas markets, and more importantly, to upgrade the industrial chain, build a complete industrial chain, and transform our manufacturing industry from Transformation from low-end to mid-to-high end!

Compared with what the previous three economists said would affect exports, inflation, and the harvest of dollar hegemony, what Li Weidong said is obviously positive and good news. The leaders of the ministries and commissions sitting in the front row couldn't help but shine.

However, Li Weidong went on to say: But everyone, don't be too happy too early. In addition to investment, the inflow of Western capital will also bring competition. The West has advantages in brand and technology, and in many industries there are still developments. advantage of rules.

When Western capital enters, it will bring these brands, technologies, and rules to China. At that time, our local enterprises will inevitably be impacted, and many enterprises will be eliminated by then.

The host then asked: Chairman Li, if, as you said, Western capital brings brands, technologies, and rules to invest in the Chinese market on a large scale, how should our Chinese companies respond?

Two words, upgrade! Li Weidong continued: Enterprises want to upgrade their own technology and produce more competitive products, and it is best to be able to compete with Western companies for the right to speak in the industry.

If we can make rules like the West, then we will be invincible. To become a rule maker, we need to build a complete industrial chain, so that we have the ability to make rules.

Formulating industry rules is easy to say, but very difficult to do! Professor Huang said from the side.

Li Weidong responded: The road to the rise of a big country is full of thorns. If industry can be developed so easily, then the world will be full of industrial powers!

Dean Cai said: Chairman Li, it is great to be a rule maker, but I don't think it is necessary to build a complete industrial chain, at least not in all fields, to pursue a complete industrial chain.

The process of globalization has been carried out for so many years, and the division of labor in various industries on a global scale has already matured. If you deliberately pursue a complete industrial chain, it is tantamount to breaking the existing mature global division of labor.

Let’s not talk about the success of building a complete industrial chain, but the cost of building an industrial chain is definitely much higher than using an existing industrial chain. Even if the industrial chain is completed, it will face competition with the existing industrial chain. From a cost point of view, this is not worth it.

Li Weidong smiled slightly: To be honest, I never believe in globalization! I don't even believe in global division of labor. The concept of globalization was proposed by the Americans. The Clinton administration back then was pushing the so-called globalization.

But I think the reason why Americans promote globalization is because globalization is good for the United States. As you just said, the U.S. dollar is the global currency, and the United States can harvest the world through the U.S. dollar and U.S. debt, so Americans hope for globalization.

But what if one day, globalization is no longer beneficial to the United States? Will the United States continue to support globalization? Maybe at that time, the United States will withdraw from various international organizations, abandon dialogue with each other, and only engage in unilateralism, and on the premise that the interests of the United States are given priority.

Just like international trade, the United States no longer abides by WTO agreements, but negotiates with more than 100 WTO members separately, reaching more than 100 different bilateral agreements. And with the strength of the United States, this kind of bilateral model can obviously get more benefits!

How is this possible! Free trade is the value of the United States, how can the United States give up its own value! Dean Cai curled his lips.

The value of the United States is only interests! Li Weidong shrugged, and then said: Of course what I said is just a prediction now. Forecasts, there are some accurate ones, and some inaccurate ones. Whether my predictions are accurate or not will take time. inspection.

Dean Cai nodded. He felt that Li Weidong's mention of the word prediction at this time was equivalent to taking a step back. He found a step down, and there was no need for him to make trouble again.

However, Li Weidong went on to say: It's just that my prediction is not inaccurate yet. So here, I also remind entrepreneurs to leave one more backup in terms of supply chain.

You can choose that you cannot build the entire supply chain, but at least you must be able to ensure that if the supply chain encounters a malicious interruption one day, you can find a substitute so that the enterprise can survive!

...

The outbreak of the subprime mortgage crisis has accelerated the relocation of American industries, and the biggest beneficiary of the relocation of American industries is naturally China.

In the early 21st century, China could only rely on low-end manufacturing to earn some hard money, but by 2010, China could already dominate part of the international supply chain.

And when the United States completely settled the subprime mortgage crisis in 2012, they suddenly discovered that China's position in the international supply chain was no longer something that the United States could handle by itself.

Therefore, after the government entered its second term, it began to promote the TPP, and wanted to form gangs to deal with China. In the era of knowing the king, it is simply a big stick of trade wars and sanctions, directly helping China to promote industrial upgrading.

The accelerated relocation of American industries is inseparable from the four quantitative easing.

During the subprime mortgage crisis, the U.S. conducted four quantitative easing operations. The first time was to lend money to the U.S. government to purchase financial derivatives of subprime mortgages. The second, third, and fourth times were to purchase U.S. treasury bonds, which are issued by the government. The Fed prints money to lend to the U.S. government.

All the money from QE1 went into the pockets of financial institutions. When financial institutions got the money, they would naturally reinvest it. At that time, the United States and Europe were in deep financial crisis, and there were no suitable projects for investment, so the money was just Being able to invest in developing countries has also promoted the relocation of American industries in disguise.

Part of the money from QE2 to QE4 was used for wars, such as maintaining military missions in Afghanistan and Iraq, the war in Libya, the war in Syria, and the fight against ISIS, all of which cost money.

Another part is used in the government's economic policy, the so-called American Recovery and Reinvestment Act, which includes the reform of the financial system, the reform of education and medical care, increasing investment in infrastructure construction, and investing in the energy field.

Everyone knows the final result. Except for the achievements in the energy field, the United States has developed a shale oil industry and achieved self-sufficiency in oil, and almost nothing has been achieved in other aspects.

For example, investment in infrastructure construction. At that time, dozens of major infrastructure construction projects were set up, and then discussions began. As a result, the discussions did not come to fruition until the end of Mao Zedong's term of office.

*** is ambitious to build a 20,000-kilometer high-speed rail for the United States, but just a California high-speed rail has been demonstrated for 14 years. In the past 14 years, China has built nearly 40,000 kilometers of high-speed rail.

And this argument alone cost 5 billion U.S. dollars, and after 5 billion U.S. dollars were spent, not a single rail was seen.

In the end, the money from QE2 to QE4 also entered the US financial system, and was then used by financial institutions to invest in some profitable industries.

It is also for this reason that although the government's quantitative easing has stabilized the U.S. economy, it has not received positive evaluations, because the money went around and eventually fell into the hands of capital, and the common people did not see it.

Compared with the unlimited QE launched by the government of Sleeping King, the evaluation is much higher, because there is a lot of money in the unlimited QE, which is directly distributed to the common people in the form of cash. At that time, it was reported in the news every day that the United States was giving out money again, and it was hundreds of dollars per person, and this money was used.

Although a large part of this money has also flowed into the stock market and property market, pushing up the Nasdaq index and making Tesla stock sky-high, according to economists' estimates, at least one-third of it is converted For the direct consumption of ordinary people.

It's just that after a period of time, the common people still have to bear the consequences of inflation brought about by the distribution of money. Not only the United States, but all the countries that distributed money during the epidemic have experienced severe inflation after more than a year, which is also a sequela of the money.

In the face of inflation, the rich definitely don’t care. The daily necessities have doubled, but it’s just a drizzle for the rich. They are all people who drive Bentley Rolls-Royce, and they still care about the 10 yuan a liter of oil. money? 98 is directly filled up and there are not many beeps!

However, for the poor, it is an unbearable burden of life, and it is distressing to spend an extra ten yuan for a tank of gas. The hundreds of thousands of dollars issued back then were all vomited out in one inflation, and a sum had to be paid back.

Closer to home, the four times of quantitative easing during the subprime mortgage crisis accelerated the transfer of American industries. At that time, there was a sovereign debt crisis in Europe, and industrial transfer was definitely unacceptable.

South Korea, Mexico and other countries have insufficient economic volume and can undertake few industries. Southeast Asian countries such as Vietnam and Indonesia lack sound infrastructure. As for India, everyone knows that it is a pit.

Therefore, the only destination for the transfer of American industries is China. China also took advantage of this period to establish a complete supply chain system.

By the time low-end intensive manufacturing moves to Southeast Asia, China has already controlled the upstream supply chain. Countries such as Vietnam and Bangladesh can only serve as supplements to China's supply chain.

Take Vietnam for example. After six months of hard work, it has done a trade volume of 370 billion U.S. dollars. It claims that the trade has grown by tens of percent, but after the calculation, there is only a surplus of 700 million U.S. dollars, and the profit is less than 0.4%. You can earn more than this in sales promotions.

This is because Vietnam does low-end processing of supplied materials, but does not have a complete industrial chain. The upstream is subject to raw material suppliers, and the downstream is subject to market sellers. They have no pricing power at all.

According to the Japanese flying geese theory, in the process of industrial specialization, the countries that undertake the industry should be scattered. The head goose of the United States left part of its core industries and gave some of them to Western Europe, Mexico, Japan and other countries.

Western Europe will distribute the eliminated industries to Central Europe, followed by Eastern Europe, Mexico will spread the industry to Latin America, Japan will distribute the industry to the four Asian tigers, and then from the four Asian tigers to the four Asian tigers, and then spread to other Asian countries.

In the end, rich and developed countries retain high value-added industries, while poor and backward countries accept low value-added industries. All countries add up to form a complete industrial chain, forming the so-called globalization.

However, this theory does not work in China. China is large enough to absorb the entire industrial chain. Therefore, when the industrial chain reaches China, it becomes digested within China, and finally forms a complete industrial chain.

But this is not the most important thing. The most important thing is that while China has formed a complete industrial chain, it has also formed a huge domestic demand market for terminals.

Therefore, when the United States wants to remove the industrial chain from China, it will face two problems. One is that it cannot find a country to undertake such a huge industrial chain, and the other is that capital is inseparable from the Chinese market.

The first question is that the Chinese government has launched a TPP to bring in a large number of Pacific countries, hoping to use the entire Pacific country to undertake China's industrial chain.

As a result, after King Wang came to power, he withdrew from the group first. Instead, China wanted to join the TPP and let other TPP countries become vassals of China's industrial chain.

And the second question is really unsolvable. It is simply impossible to keep capital away from the market.

For example, in order to suppress China's chip industry, the United States spent more than 50 billion U.S. dollars in subsidies and created a Chip Act, one of which is that companies that have received my subsidy are not allowed to invest in China for ten years. This clearly means to let the enterprise choose a side.

However, the first one to jump out against this clause was not Samsung in South Korea, nor TSMC on the other side, but Intel in the United States.

In China, Intel not only sells tens of billions of dollars of chips every year, but also invests in industries such as cloud computing, big data analysis, Internet of Things, smart devices, wearable technology, intelligent robotics, drones, Internet of Vehicles, virtual reality, etc. , Intel's advance deployment in these industries is to gain more market share in the future.

In order to get your billions of dollars in subsidies from the US government and give up the market of hundreds of billions, do you really think that Intel is a stick?