I spend my day doing research for my writing, and also just soaking in the general feeling of the present and the direction of the winds of change. Now and again, a group of seemingly disconnected happenings act as different straws that show the direction and speed of the wind. This will be the first of my somewhat irregular updates on such straws.
The Trilateral Commission Meets In Tokyo
The Trilateral Commission was set up by David Rockefeller in 1973 to bind together the rising powers of Asia with US-European hegemony. As Asia has gained a greater and greater weight in the global economy, the Asian nations have grown increasingly tired of the US-European arrogance and lack of any real thoughts of the impacts of their actions upon their Asian “partners”. In the past few years the single-focused posture on the limitation of China as a threat to US-European hegemony has greatly exacerbated tensions. The Association of South East Asian Nations (ASEAN) countries have striven for a peaceful and profitable relationship with China and see the increasingly aggressive US-Europe stance as highly problematic. As Shigesaburo Okumura, the editor of Nikkei Asia, put it:
Many of the participants seemed sick and tired of the decoupling with China imposed by the U.S. under the name of "Democracy vs. Autocracy" dualism. Some of them worried about the arbitrary and unpredictable nature of trade sanctions and their implementation by the U.S.
In many a good mafia movie, the mafia head is faced with a rising challenger. If he snuffs that challenger out early and in such a way that reinforces the other mafia members’ respect for/fear of him, his reign continues. If he senses the threat too late, or acts too slowly, he may be unable to enforce discipline. At this point, any moves to enforce discipline may meet with increasing resistance and the best option may be to compromise to gain time to undermine/defeat the challenger. The US and its European “allies” (the West) left it too late to deal decisively with China, wasting time on its Global War on Terror and believing its own nonsense about the wonders of “capitalist liberal democracy”. Instead of now compromising to gain time to at least attempt to rebuild their own capabilities (which they may not be capable of given the internal issues I have covered previously), or even to lessen their own fall, they have entered an attempted all out economic/political/covert/overt war with China and Russia. Third nations, such as those in Asia, are forced to increasingly pick sides with little or no thought for the impacts upon their own interests. The Trilateral Commission meeting is a straw showing that the wind is increasingly flowing against the West, as its’ attempts to isolate China (and Russia and Iran) increasingly end up isolating itself.
Resistance to the “Huaweiing" of China
When it became obvious that Huawei was threatening the dominance of Apple and many other parts of the US technology sector, a full court press was put in place by the US state and technology sector to destroy it. Banned from the dominant Google and Apple mobile operating systems, and US chip technology, its challenge in handsets was destroyed. The destruction of its challenge in routers and switches was furthered through outright bans in many nations due to “national security” issues. The reporting of significant security holes in Western providers' offerings that were open to Western security agencies went unchallenged of course.
With its latest acts, the US has extended the Huawei treatment to the whole of China, attempting to keep it trapped in a middle income of growth without development; cutting China off from the more advanced chips. Given the scale of Chinese purchases of semiconductors, the impact of this ban on non-US producers will be extremely large. In response, some of those producers are resisting the pressure and the US is bending. A one-year reprieve was given to South Korean chip manufacturers during which China can stock up as much as possible. At the same time, US manufacturers are designing around the US restrictions. The Dutch ASML, that makes the high-end lithography machines central to the production of the most advanced chips is also pushing back. David Goldman covers the inability of the US state to order even its own manufacturers to stop dealing with China, and the increasing capabilities of the Chinese themselves to produce the required chips. The US is driving China to remove their dependence upon US chip manufacturers (and those of its “allies”), while at the same time deeply annoying many of its so-called “allies”.
October Europe and China EV Sales
October is not a big month for Tesla sales in Europe, as it usually sources cars for Europe from its Shanghai plant in the first and second months of a quarter. With the shipping delay, this produces an increase in sales in the second and third months, and a lull in the first month (the previous month Shanghai focuses on China sales). With the increase in Tesla Berlin output though, even the first month of a quarter has more than just a few Tesla sales.
In October, Tesla sales in Europe were 5,792, a 100% increase year-on-year representing the increase in the Berlin output (which is still increasing). The Chinese Geely had 9,789 sales (up 35% y-o-y), and SAIC had 5,328 sales (up 44% y-o-y), with the rest of the Chinese manufacturers having 646 sales (up 19% y-o-y). The Chinese manufacturers do not have the intra-quarter variations of Tesla, so these numbers are more representative of their usual monthly sales. All of these sales increases were greater than the overall EV market growth of 14%.
The market leaders of VW (29,996 sales and 13% y-o-y growth), Stellantis (19,291 sales and 12% y-o-y growth), BMW (11,788 sales and 18% y-o-y growth), Renault (10,717 sales and 13% y-o-y growth) and Hyundai-Kia (9,985 sales and 13% y-o-y growth) will be increasingly impacted by the Tesla Berlin output, the Telsa Shanghai increased capacity and the increasing focus of the Chinese manufacturers on Europe. The latter have already gained a 7.6% market share, and that is without a meaningful contribution from such manufacturers as BYD; a company with a monthly output equal to the whole of European EV market sales.
Another problem for the European manufacturers is that their selling of plug-in hybrids (PHEVs) with relatively small batteries is coming home to roost, as the EU is now implementing more accurate (i.e. much worse) assessments of their CO2 output as they are mostly driven using the ICE. This is very different to China, where the relatively large batteries in PHEVs makes them more akin to extended range electric vehicles (EREVs). Sales of battery electric cars (BEVs) have already exceeded PHEVs in Europe, and with the removal of German subsidies on PHEVs and the general bad press for the small battery PHEVs, their sales which are predominantly by the European producers will decline in importance. This can only aid Tesla and the Chinese producers. Adding to this will be the very high energy prices in Europe due to the anti-Russia energy sanctions which drive up European manufactures' costs. The European manufacturers will increasingly not even have the first month of a quarter as a respite from the Tesla and Chinese manufacturer’s onslaught.
In China, the European manufacturers are continuing to fail spectacularly in the EV market. Volkeswagen Group continues to grind along at a pathetic 3.9% market share (7th place), with now even Dongfeng threatening to overtake it this year and others threatening to push it out of the top 10 next year. The other German manufacturers (and Japanese) are in an even worse shape, with Mercedes slashing prices after having been shown to be consciously selling faulty cars for many months. Any “halo” price premium is disappearing in the Chinese EV space for European manufacturers. 2023 may witness huge market share and profitability losses for the German manufacturers in China as sales move even more from ICE vehicles to EVs, while the German manufacturers are increasingly challenged at home.
Another challenge for the European manufacturers will also be the Euro-7 regulations that will come into effect in 2025, that as currently written require much reduced nitrous oxide emissions (not an issue for EVs) and emissions from tyres and brakes (EVs tend to use brakes a lot less due to regenerative braking). Just as they will be reeling from the devastation of their Chinese market share in 2023 and 2024, and the Tesla/China attack in Europe, it will be made easier for small cheap Chinese EVs to invade the small car market and displace those European manufacturers.
https://www.carscoops.com/2022/11/vw-group-sold-25-of-all-new-evs-in-europe-last-month/
https://insideevs.com/news/623665/china-plugin-car-sales-october2022/
https://insideevs.com/news/622125/mercedes-cuts-eqe-eqs-sedan-prices-china-by-as-much-as-33000usd/
The US is increasingly unable to bring others into its US-Europe coalition, while at the same time its European “allies” are economically suffering due to the anti-Russia sanctions and severe mistakes made by some of their major companies with respect to transport electrification. Some of the European elites are wakening up the self-harming nature of the sanctions, and their increasing vassalization by the US while their industries flee ruinous energy prices, but it will be incredibly hard for them to gain the fortitude necessary to regain some sovereignty. Instead, they are taking a more and more self-defeating anti-China stance. In the meantime, the US drives more and more nations toward the opposite camp and greatly weakens its own European “allies” in a vain attempt to reinvigorate its’ own industrial strength at Europe’s cost.
Great work. Thanks.
Stats I dug up yesterday indicate another trend: After three years of Covid, US GDP has grown 3.4%, with 1,000,000 Covid deaths and 3,000,000 Long Covid invalids. China's GDP has grown 13.8%, with 7,000 deaths and 38,000 Long Covids.
According to the FT covid tracker yesterday, the 7 day rolling average of NEW CASES per million people was China 20, US 100.
Deaths per million? China 0.0003, USA 0.8, and China's testing regime catches every case.
95% of China deaths are unvaccinated. In other words, the inactivated vaccines used in China seem to be doing what they are designed to do -prevent serious illness and death.
great if europe was to wake up, but i think it will be too late - already probably is too late, for them to wake up.. the usa is not their friend and they will come round to seeing this - the hard way...