India Economy Thread

[Nilgiri]

Too many wrong data
According to Bloomberg, TechInsights' disassembly confirmed
Huawei's new phone PURA70
The chip is Kirin 9010 7nm process from SMIC
NAND storage from Yangtze Memory Technologies Co
6.6-inch OLED straight screen from BOE, Visionox

Huawei Relies on China’s YMTC for Memory Chip in Latest Phone

Huawei Technologies Co.’s latest flagship smartphone has switched to a domestic supplier for a major component in another step toward building a wholly made-in-China device.

www.bloomberg.com

The deeper layer regarding value addition tiers though is still early days for PRC.

World Bank Open Data

Free and open access to global development data

data.worldbank.org

World Bank Open Data

Free and open access to global development data

data.worldbank.org

2022, PRC imports/licenses about 44 billion USD in intellectual property from the world, while earning about 13 billion USD. (net = minus 31 billion USD)

Japan the numbers are 28 and 47 billion respectively (net = positive 19 billion USD)

US the numbers are 53 and 127 (net = positive 74).

These numbers reflect in the actual value addition, for example the huge jump in PRC in last few years on IP export side correlates well with huawei switchgear tech advances.....i.e stuff where PRC has developed a more genuine competitive edge.

i.e there are things involved much more than sum of component parts which have much more nominal profit margin (from deepest IP side of things)....not to mention the services sector side of things as well that provide even more sustainable value addition long term in the new emerging sectors.

i.e all the layers past raw production throughput that many/most people get transfixed on.

You can actually see this in the composition of what PRC imports regarding integrated circuits compared to what it exports (in 2022, this was a net negative still too....compared to say broadcast/comms electronics as UN WTO classifies these).

So the throughput stuff is up for grabs increasingly. GDP estimates (incl raw exports, import numbers) only really correlate to throughput....rather than the deeper look into things.

@j_hungary @dbc @Hamartia Antidote

 

[JaneBhiDoYaaron]

I have said many times Chibese are getting poor and more and more are not able to afford iPhone. It is becoming luxury items. Different between rich and poor is growing in China.

 

[huanghong]

The deeper layer regarding value addition tiers though is still early days for PRC.

World Bank Open Data

Free and open access to global development data

data.worldbank.org

World Bank Open Data

Free and open access to global development data

data.worldbank.org

2022, PRC imports/licenses about 44 billion USD in intellectual property from the world, while earning about 13 billion USD. (net = minus 31 billion USD)

Japan the numbers are 28 and 47 billion respectively (net = positive 19 billion USD)

US the numbers are 53 and 127 (net = positive 74).

These numbers reflect in the actual value addition, for example the huge jump in PRC in last few years on IP export side correlates well with huawei switchgear tech advances.....i.e stuff where PRC has developed a more genuine competitive edge.

i.e there are things involved much more than sum of component parts which have much more nominal profit margin (from deepest IP side of things)....not to mention the services sector side of things as well that provide even more sustainable value addition long term in the new emerging sectors.

i.e all the layers past raw production throughput that many/most people get transfixed on.

You can actually see this in the composition of what PRC imports regarding integrated circuits compared to what it exports (in 2022, this was a net negative still too....compared to say broadcast/comms electronics as UN WTO classifies these).

So the throughput stuff is up for grabs increasingly. GDP estimates (incl raw exports, import numbers) only really correlate to throughput....rather than the deeper look into things.

@j_hungary @dbc @Hamartia Antidote

However, from the perspective of trend, China's trend is upward,
The curve of intellectual property imports began to decline, while the export curve is rising
For example, China's integrated circuit import volume
2021 is $ 439.7 billion
2022 is $ 415.6 billion
2023 is $ 349.3 billion

 

[DDG-80]

However, from the perspective of trend, China's trend is upward,
The curve of intellectual property imports began to decline, while the export curve is rising
For example, China's integrated circuit import volume
2021 is $ 439.7 billion
2022 is $ 415.6 billion
2023 is $ 349.3 billion

Various factors have contributed to this deceleration, including global economic uncertainties, supply chain disruptions, and domestic challenges. While the decline in import volume might suggest advancements in domestic production capabilities, the broader economic context indicates that this slowdown is also influenced by external economic pressures and internal structural adjustments.

 

[huanghong]

Various factors have contributed to this deceleration, including global economic uncertainties, supply chain disruptions, and domestic challenges. While the decline in import volume might suggest advancements in domestic production capabilities, the broader economic context indicates that this slowdown is also influenced by external economic pressures and internal structural adjustments.

The import volume of integrated circuits in 2022 is 538.4 billion
The import volume of integrated circuits in 2023 is 479.5 billion
Import volume decreased by 58.9 billion
China's production of integrated circuits in 2022 is 324.1 billion
China's production of integrated circuits in 2023 is 364.4 billion
Production increased by 40.3 billion
Yes, the reduction in demand has an impact on imports, but obviously, the impact of the increase in domestic chip production is far greater than the reduction in demand

 

[kaku]

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Hyperspectral imaging for defence will launch in Sept 2024.

 

[Guynextdoor]

@Beijingwalker can you confirm if the iPhone made in China have bulbous bow buddy?

 

[Hamartia Antidote]

Most Components Are Still Made In Cina.China Has Complete Value Chains Within It's Borders.It Has A Manufacturing Ecosystem Developed Over 4 Decades.India Does Not Have That.All It Will Take Is For Xi Is To Impose Export Duties On Those Components Or Even Ban Them Completely

Not as much as you think

18 Major Companies Tied to the Apple Supply Chain That You Didn't Know About

A look at some of Apple's top suppliers gives an understanding of how this growing company functions. By looking at the Apple supply-chain model, along with the benefits and challenges for each component, you can gain an understanding of large-scale, multinational production streams.

www.investopedia.com

 

[Joe Shearer]

The deeper layer regarding value addition tiers though is still early days for PRC.

World Bank Open Data

Free and open access to global development data

data.worldbank.org

World Bank Open Data

Free and open access to global development data

data.worldbank.org

2022, PRC imports/licenses about 44 billion USD in intellectual property from the world, while earning about 13 billion USD. (net = minus 31 billion USD)

Japan the numbers are 28 and 47 billion respectively (net = positive 19 billion USD)

US the numbers are 53 and 127 (net = positive 74).

These numbers reflect in the actual value addition, for example the huge jump in PRC in last few years on IP export side correlates well with huawei switchgear tech advances.....i.e stuff where PRC has developed a more genuine competitive edge.

i.e there are things involved much more than sum of component parts which have much more nominal profit margin (from deepest IP side of things)....not to mention the services sector side of things as well that provide even more sustainable value addition long term in the new emerging sectors.

i.e all the layers past raw production throughput that many/most people get transfixed on.

You can actually see this in the composition of what PRC imports regarding integrated circuits compared to what it exports (in 2022, this was a net negative still too....compared to say broadcast/comms electronics as UN WTO classifies these).

So the throughput stuff is up for grabs increasingly. GDP estimates (incl raw exports, import numbers) only really correlate to throughput....rather than the deeper look into things.

@j_hungary @dbc @Hamartia Antidote

Whoa!

Need to read this carefully a couple of more times.

 

[Joe Shearer]

@Beijingwalker can you confirm if the iPhone made in China have bulbous bow buddy?

Does BW have a bulbous bow himself?

 

[Beijingwalker]

I have said many times Chibese are getting poor and more and more are not able to afford iPhone. It is becoming luxury items. Different between rich and poor is growing in China.

lOl, Compare to rich Indians , Chinese people are alway poor.

 

[Musings]

Guys stop putting repetitive posts up. Once is enough

 

[panzerfaust 3]

steal? somebody needs lessons in language basics.

That aside, Xi has completely screwed up China in the name of broadening the wealth there. It was/is a noble goal and I compliment him for that but he has no clue how to go about it.

Could you please elaborate? What is the ground reality?

 

[Nilgiri]

Whoa!

Need to read this carefully a couple of more times.

Raghuram Rajan has good idea of where the long term springiness is for Indian HR deployment (relative to world trends compared to say PLI capital lubricant) especially with land and labour laws stagnant for cluster logistics onshoring past states with proven track record like TN. The problem is current Indian establishment in charge dont listen to him much now.

Even with goods export stagnating at ~ 450 - 500 billion range from last year to this year....while service exports (through GCC and other models its transitioning into) is what is still growing fairly fast.

In any case there is a larger reality constraint Indian economy still has to work under to large degree while its wealth and production is small % compared to world average.

PRC is downstream of these things in its own way. Not taking anything away from what they have done in 5G, 5G+, 6G etc and increasingly in EV battery tech too, they have made objective advances here that are bourne out by the IP numbers they earn from rest of world.....past things like what I've seen with Huawei financing RnD in universities with departments, professors and even peer colleagues I know.

But compared to what has worked for say Huawei here......integrated chip apex manufacturing value addition by itself is fairly small (compared to the investment), its the HR you invest into researching, developing, organising it and operationalising it into larger product lines (like with Huawei) that matters far more.

This ultimately reflects in the IP transfer numbers (how unique you do it compared to others) and also the related service sector numbers inducted in the larger economic circuitry around it. Last I looked about 10 billion of the 13 billion that PRC earned from world was from huawei and related broadcast/comms companies. i.e everything else was just 3 billion or so....so the net trade for say integrated circuits by themselves as a category reflects that.

There is a strategic argument for the apex drive though (related to military autarkic capability), but that is another subject.

There are juicy tiers (in large world commercial economic domain) for India to really get into here in all kind of ways....but it requires knowing how to work with what you got rationally and not putting the cart in front of donkey too much. Appropriate price signalling for investment.

But there are warning signs for India building up already like the small and medium cap bubble (driven by desperate small investors).... because again the govt intervention has been very flawed.

i.e what are the logjams for manufacturing (in large densely populated states) that requires less upfront investment (that say TN has proven India can do over last 20 years be it Chennai car hub or Tirrupur RMG)....why aren't those being addressed before you frontload more apex stuff in piecemeal parts for brochures....totally unrelated to what agri labour of north India needs to increase their opportunities with what they know.

Indian economy is extremely stratified now. Huge problem if apex of it wants to simpy continue to copy paste apex stuff (from other world's vastly different contexts) without genuine hard work in first doing their bit in bringing basic things to the larger bulk regd appropriate investment there in supply side both in immediate livelihood above current spread on offer...and also for the long term human social development.

 

[Nilgiri]

However, from the perspective of trend, China's trend is upward,
The curve of intellectual property imports began to decline, while the export curve is rising
For example, China's integrated circuit import volume
2021 is $ 439.7 billion
2022 is $ 415.6 billion
2023 is $ 349.3 billion

Could I get a source for these numbers?

I am using OEC:

https://oec.world/en/profile/country/chn

The springiness margins PRC has developed in "broadcasting eqpmt" (i.e Huawei) is very distinct in its raw current account surplus generated here from say 2019 to 2022

Compared to taking integrated circuits where the current account is close to zero and generally holding around minus 50 billion or so for that chunk of time in comparison....i.e the throughput phenomenon dictated in end by US seignioriage (And say bidenomics 5 trillion debt-based spend push that found its way into wallstreet).

In end the IP earnings PRC has right now from world (i.e its core USP relative to rest of world past raw throughput capex-->opex related production) translate very comfortably around Huawei (I looked at the WTO patent distribution too some years back for this, it supports this compared to say what SMIC can operationalise vis a vis say Nvidia ecosystem).

This is large part of why PRC also hemorhagged 6 trillion in market capitalisation last few years. There has not been optimal deployment in investment (for large sectors of the economy and where they stack up as options for the Chinese public to put their savings etc).... like there has been in huawei. i.e using huawei as a good gold reference here for what developing world can accomplish if it deploys things adequately w.r.t what reality of what it has.