Markets Weekly January 4, 2025

Hello my friends, today is January 4th and this is Markets Weekly. So this past week we had a bout of volatility in the markets but at the same time it was a shortened holiday trading week so I'm not sure if I'd read too much into it. So today let's talk about something a bit more thematic and a bit more appropriate to the upcoming trade war because that is coming. So I came across the work of Michael Botez who was a professor in China who specializes in global trade and China in particular. Now Michael has a very interesting perspective based on his recent writings that he thinks that tariffs would actually be good for the US whereas it would increase GDP in the US and also employment.

你好，我的朋友们，今天是1月4日，这里是《市场周报》。上周市场出现了一些波动，但由于是个缩短的假期交易周，所以我不确定是否需要对此过多解读。今天，我们来讨论一个更具主题性和与即将到来的贸易战更相关的话题，因为贸易战就在眼前。我注意到一位名叫迈克尔·博特兹的教授，他在中国研究全球贸易，特别是中国问题。迈克尔最近的文章中提到一个非常有趣的观点，他认为关税对美国其实是有利的，因为这可以增加美国的GDP和就业。

Now reading more into Patis' perspective and thanks to Andy Constin for tagging this extensive piece from Michael Botez, I came away with the impression that Michael shares the same perspective of the incoming Trump administration based on writings of incoming Trump officials. So I think it's helpful to understand this perspective in anticipation of what may be to come. So that's all we're going to talk about today. But before we begin let's level set a little bit. So if you were like me and you studied economics and school you would have come away with the conclusion that trade is good period the end. So once upon a time there was a very influential thinker by the name of David Ricardo.

现在，我深入阅读了Patis的观点，并感谢Andy Constin推荐了Michael Botez的一篇详尽文章。我得出的印象是，Michael与即将上任的特朗普政府官员的著作中所表达的观点一致。因此，我认为理解这种观点有助于我们预见未来可能发生的事情。这就是我们今天要讨论的全部内容。但在我们开始之前，让我们先稍微铺垫一下。如果你和我一样在学校学习经济学，你会得出贸易是好事这个结论。曾经有一位非常有影响力的思想家，名叫大卫·李嘉图。

And David Ricardo had this idea of comparative advantage whereas each country is relatively better at producing one thing than the other when compared to other countries and so when they trade with each other both countries are better off. Let's say Saudi Arabia for example big big country mostly desert but has a lot of oil. So if they were to grow corn you know it take a lot of water which they don't have a lot take a lot of resources and they probably wouldn't grow a lot. In contrast it'd be much easier for them to dig for oil compared to spending resources to grow corn.

大卫·李嘉图提出了比较优势的概念，他认为每个国家在某种产品的生产上相对于其他国家具有更大的优势，因此当这些国家进行贸易时，双方都会变得更好。例如，沙特阿拉伯是一个大型国家，主要是沙漠，但拥有丰富的石油。如果他们种植玉米，就需要大量水资源，而这些资源他们并不充沛，可能产量也不会很高。相反，开采石油对于他们来说要比花费资源去种植玉米容易得多。

Looking at another country for ants for example has a lot of good agricultural land it'd be easy for them to grow a lot of corn a lot of wheat and so forth. But as far as I know they don't have a lot of oil there so if they were to try to produce oil it'd take a lot of resources to try to find oil and they probably wouldn't produce all that much it'd be very very expensive to produce that. Now suppose these two countries traded with each other what you would end up seeing is Saudi Arabia specializing in producing oil and France specializing in producing agriculture goods and these two countries trading with each other such that at the end of the day Saudi Arabia would have more oil and more agricultural products than they would if they didn't trade with anyone and France would have more oil and more agricultural products than they would if they didn't trade with anyone.

将其翻译成中文，保持易懂： 设想有另外一个国家，比如法国，它有很多优质的农业用地，很容易种植大量的玉米、小麦等等。但据我所知，法国的石油资源不多，所以如果他们尝试生产石油，将需要投入大量的资源来寻找石油，而且产量可能不会很高，生产成本也会很高。现在假设这两个国家互相进行贸易，你会发现沙特阿拉伯专注于生产石油，而法国则专注于农业产品的生产。这两个国家通过贸易，最终的结果是，沙特阿拉伯会比不与其他国家贸易时拥有更多的石油和农业产品，而法国也会比不进行国际贸易时获得更多的石油和农业产品。

So both countries would be better off. Now of course you would have some distributional consequences to this like if you were a farmer in Saudi Arabia or if you were an oil worker in France you guys would be out of work and you know have to find work elsewhere but the government could also you know tax and redistribute some of the profits in the winning industries to help compensate the losing industries but at the end of the day overall the countries would be better off. Now that's a theory and that's why you're taught that trade is better at the end and in practice you see a little bit of that in real life for example in the US when we trade we do have a lot of cheaper manufacturer goods the manufacturers did lose their jobs but they also received some benefits from the government of course and not very generous.

因此，两国的整体状况将会有所改善。当然，这种情况下会出现一些分配上的影响，比如如果你是沙特阿拉伯的农民或者是法国的石油工人，你们可能会失业，需要在其他地方找到工作。但政府可以通过对获利行业征税，并将部分利润重新分配给受损行业，以帮助抵消其影响。不过，总体来看，国家整体会变得更好。这只是一个理论，这也是为什么你在学习中会了解到贸易最终是有利的。在实际生活中，你会看到一些例子，比如在美国，通过贸易我们确实拥有了许多更便宜的制造商品，虽然制造业工人失去了工作，但他们也从政府那里获得了一些补贴，尽管金额并不非常慷慨。

So kind of worked out that in real life but Michael looks at the data on a more global scale and realizes that there's something very important where it did not actually work as predicted. Now looking at this chart you can see that some countries like the US have chronic current account deficits and other countries like China have chronic current account surpluses and what that means is that the US is always buying more from abroad than it's selling from abroad and some countries like China are always selling more goods and services abroad than they are importing from abroad. Now that is kind of something that shouldn't happen because you would expect that over time these trades in balance and stood balance out.

在现实生活中，好像这一点确实有效，但迈克尔从全球的角度查看数据时，意识到有一个非常重要的问题并没有如预期般运作。现在，看着这个图表，你会发现一些国家，比如美国，长期存在经常账户赤字，而其他国家，比如中国，则长期有经常账户盈余。这意味着美国总是从国外购买的多于向国外出售的，而像中国这样的国家总是向国外出售的商品和服务多于从国外进口的。从理论上讲，这种情况不应该发生，因为你会期望随着时间的推移，这些贸易差额会逐渐平衡。

Now in the time of David Ricardo they were under the gold standard right so you would expect let's say if we were under the gold standard that as the US ran these chronic current account deficits gold would flow out of the US and into China that would mean less gold less money in the US US prices would deflate more gold more money in China you would have an inflationary phenomenon so as goods in the US became cheaper and they became more expensive in China and then Chinese would buy more goods from the US and you would have that money would flow back from China into the US and these trade relationships would equilibrate. In a fiat system you would expect something similar with currencies where the R&B would appreciate things would become cheaper in R&B terms so it would be cheaper for Chinese companies to buy stuff from the US and again trade relations would equilibrate but obviously that's not what's happening here we have these chronic trade imbalances and so the system is not working as predicted and what you end up is a lot of people in the US who basically don't have jobs anymore like in a basic framework you would expect these people to go and migrate to industries where the US has a comparative advantage at let's say looking back into the Saudi Arabian oil case you would expect all the farmers there to go and become oil workers and again there's not that equilibrium. Now Michael is looking at this anything that it's a couple reasons for this one is that the US is a very desirable destination for capital so we have NVIDIA we have a very deep and liquid trade market and so forth so what ends up happening is that as foreigners are making a lot of money again selling goods to the US and ending up with a lot of dollars rather than using that to buy goods and services from the US to equilibrate the trade relationship what they're actually doing is buying a whole ton of financial assets in the US which again are highly desired.

在大卫·李嘉图的时代，人们使用金本位制。假设我们现在也在金本位下，美国长期出现经常账户赤字，黄金就会从美国流出，流入中国。这意味着美国的黄金和货币减少，价格下跌，而中国的黄金和货币增加，导致通胀现象。因此，美国的商品变得更便宜，中国的商品变得更贵，中国会购买更多美国商品，这样资金会从中国流回美国，贸易关系会达到平衡。 在法币体系下，你可以期待类似的货币走势，比如人民币升值，人民币计价的商品变得更便宜，中国企业更容易从美国购买商品，最终贸易关系会达到平衡。但是，显然现在情况并非如此，我们面临长期的贸易不平衡，系统没有按预期运作。结果就是美国有很多人失去了工作。在一个基础框架下，你会期望这些人转移到美国具有比较优势的行业，就像沙特阿拉伯的石油例子中，所有农民转行成为石油工人一样，但这种平衡没有出现。 Michael 认为有几个原因导致这种情况，其中一个原因是美国是资本的极具吸引力的目的地。美国有诸如 NVIDIA 这样的大公司，还有一个深度和流动性很高的交易市场。因此，外国人在向美国出售商品并赚取大量美元后，并未将其用于购买美国的商品和服务以平衡贸易关系，而是大量购买美国的金融资产，这些资产同样非常受欢迎。

Another reason he thinks that this is not equilibrating is due to the industrial policies of countries like China where the Chinese system is very different from the US where they kind of have a strong intervention to stand from their government. For example if their government wanted to build a successful EV industry which they have the government can pour a lot of subsidies into these sectors to make them very competitive much more so than the free market could produce. Now an example of this could be for example trying to peg your currency so that it is quantically undervalued so that your experts are cheaper it could be offering cheap loans to certain industries obviously in China the government controls the being sector so they could heavily subsidize one industry if they wanted to and they do do that it could be rewriting the regulations so that it's easier for companies to produce in China cheaper. For example one thing that we all know is that the environmental regulations there are lackster than they are in the US for example and so that is a cost advantage that manufacturers have over there. It could also be things like liberal laws which are not as strong there and oftentimes the government through a special system limits internal migration to some extent. So in China because industrial policy strongly favors manufacturing and in a sense subsidizes it by kind of keeping a lot of the public very poor the Chinese have a chronic persistent advantage when it comes to manufacturing that they are able to deploy throughout the world.

他认为这种情况并未实现平衡的另一个原因是，由于像中国这样的国家的工业政策，中国的体制与美国非常不同。中国政府往往会进行强干预。例如，如果政府想要建立一个成功的电动汽车产业，他们可以在这些领域投入大量补贴，使其竞争力远超自由市场的水平。一个例子是，通过让货币保持低估值来使出口产品更便宜，或者向某些行业提供廉价贷款。显然在中国，政府控制银行业，因此如果他们想要，他们可以大量补贴某个行业，他们确实这样做了。此外，还可能通过修改法规让企业在中国的生产成本更低廉。比如，众所周知，中国的环保法规比美国宽松，这给那里的制造商提供了成本优势。还有劳工法不如美国严格，政府有时通过一个特殊制度在一定程度上限制人口内部迁移。因此，在中国，由于工业政策极力支持制造业，并通过某种方式补贴制造业，以维持很大一部分公众的贫困状态，中国在制造业方面长期拥有优势，并能够在全球范围内施展这种优势。

So if you have the government constantly subsidizing this then that's another reason why it wouldn't be a problem in the US because for chronic importing countries like the US because that means that even though Americans get cheaper household goods that is actually paid for by higher unemployment from the people who lost out the trade and because the trade relationship can't equilibrate these guys are basically stuck. So one of the other interesting things that Michael addresses is that some people think that this is a natural evolution of an economy as you become wealthier, you become more surfaces oriented and the goods things, the goods stuff you just can't compete with that it's an actual transition but Michael also points to countries like Germany and South Korea which and relatively wealthy countries but still have a very high share of manufacturing and of course if you have all these unlevel playing field due to government policy, government industrial policy it's very difficult for industries outside who don't have the same subsidies to compete.

如果政府一直在对其进行补贴，这就是美国不会出现问题的另一个原因。对于像美国这样的长期进口国家来说，这意味着尽管美国人能买到更便宜的家用商品，但这些实际上是由因贸易失利而失业的人来“支付”的。因为贸易关系无法平衡，这些人基本上就被困住了。Michael 提到的另一个有趣观点是，有人认为随着经济的发展，这是一种自然演变。当一个国家变得更加富裕时，它会更多地关注服务业，制造业等产品方面的竞争力就不够了，这是一个自然的过渡过程。但 Michael 也指出像德国和韩国这样相对富裕的国家，依然有很高比例的制造业。当然，由于政府的政策或工业政策，这样的不公平竞争环境，使没有获得相同补贴的国外产业很难竞争。

So this again becomes a very difficult problem. Now in this context is why Michael thinks that if we have tariffs it could actually be good for the US because if that is the problem that we have this chronic trade imbalance that can't balance due to the intervention of the government then we could also do things to try to even the playing field and that would be tariffs. Now if we were to do tariffs of course you would kind of be doing the same thing that these other countries are doing the US would intervene, it would be more government policy, import to become more expensive, enforce, actually will make US manufacturing more competitive and in a sense redirect resources towards manufacturing and maybe by forcing this we would have a more balanced trade relationship of course Chinese expert sectors would suffer but the US manufacturing sector would benefit at the end of the day you would have more growth in the US get over time because you would have more production manufacturing would increase in the US and you could also have more employment as more people work in manufacturing of course the US households would face higher prices and as we noted earlier Chinese companies would suffer that is one solution to this and a solution that the Trump administration has has been trying to pursue and will continue to pursue it's very clear. Another interesting idea that Michael floats is capital controls so again the Chinese companies Chinese foreign companies are making a lot of dollars but rather than using that to buy goods and services from the US they equilibrate the trade relationship they're buying a lot of US financial assets.

这又变成了一个非常棘手的问题。在这个背景下，Michael认为，如果我们对进口商品征收关税，这可能对美国有利。因为如果我们的问题是由于政府干预而导致的长期贸易失衡，我们可以采取措施来均衡这一局面，而关税就是其中一种方法。当然，如果我们征收关税，这实际上是在做其他国家正在做的事情，美国会进行干预，这将是更多的政府政策干预，进口价格会变得更贵，这实际上会使美国制造业更具竞争力，从而在某种意义上把资源引导到制造业上。也许通过强制措施，我们会拥有一个更平衡的贸易关系，当然，中国的出口行业会受损，但美国的制造业会受益。最终，美国在长期内会有更高的增长，因为制造业会在美国增加，你也可能会有更多的就业，因为更多人会投身于制造业。当然，美国消费者会面临更高的价格，我们之前提到的中国公司会受到影响。这是一个解决方法，特朗普政府已经在尝试并将继续追求这一点，这是非常明确的。Michael提到的另一个有趣的想法是资本管制。中国公司和在中国的外国公司挣了很多美元，但他们并没有用这些钱来购买美国的商品和服务以平衡贸易关系，而是购买了大量美国的金融资产。

One way that we could stop them from doing this is to have capital controls and this could come in the form of very blunt things like just not letting foreigners buy US assets or it could become come through I guess software things like taxes let's say foreigners have to pay an additional capital gains tax or income tax for dividends and things like that so to discourage foreigners from buying US financial assets that could also force them to use their dollars and maybe spend more on goods and services. Now the downside the problem to that of course is that in the US that would tank the capital markets tank the equity markets many many rich people don't like to see them they're very influential and it would also be a problem for the corporate as well as the foreign policy establishment. The foreign policy establishment uses sanctions as a major soft power tool and you can do a lot of things with sanctions without having to break out the guns and the nukes and so forth and that's what they tried but the Russia. Now if we were to have more capital controls the dollar probably wouldn't be as influential as it is now that decreases the power of the foreign policy establishment and of course corporations and banks are heavily benefiting from these free flows of capital being able to do deals and shift money throughout the world that that would not be as easy in a capital controls framework and so they would lose as well so that's not something that I hear the Trump administration talking about but of course it's definitely a possibility down the line.

一种阻止他们这样做的方法是实施资本管制。这可能采取非常直截了当的措施，比如不允许外国人购买美国资产，或者通过更柔和的方式，如对外国人征收额外的资本利得税或股息所得税等，以此来阻止外国人购买美国的金融资产。这也可能迫使他们使用手中的美元，并可能在商品和服务上花费更多。然而，这样做的问题在于，这会导致美国的资本市场和股票市场大幅下滑，很多富人对此不满，而他们往往具有很大的影响力。同时，这也会给企业和外交政策机构带来问题。外交政策机构常常使用制裁作为主要的软实力工具，通过制裁可以在不动用武力的情况下达成许多目的，这在针对俄罗斯时已经尝试过。如果我们实施更多的资本管制，美元的影响力可能会下降，这会削弱外交政策机构的权力。此外，企业和银行在资本自由流动中获得了巨大利益，能够在全球范围内进行交易和资金转移，而在资本管制的框架下，这种操作难度会增加，他们的收益会减少。因此，这并不是特朗普政府正在讨论的事情，但未来确实存在这种可能性。

I have heard some slight whispers but very very not very prominent so I don't think that will happen. But this framework I think is the framework that's going to be adopted by the Trump administration when they come and they do their vision in transforming the US so I think tariffs are definitely going to happen and they're probably going to happen as a structural way something that's going to be used not just for negotiation which it will will be used for negotiation but I think structurally it's something that it's going to be persistent because they want to do this huge reshaping of the economic order and so I'm going to leave links to the pieces that I referenced below so definitely worth a read. I think there is some conceptual errors when it comes to the monetary aspect of this but you know that that's not a specialty but in any case that's why I prepared for today thanks so much for tuning in.

我听到一些轻微的传闻，但并不太明显，所以我不认为那会发生。不过，我认为这个框架会被特朗普政府采用，以实现他们重塑美国的愿景。所以，我认为关税肯定会被实施，而且可能会被作为一种结构性手段，不仅仅用于谈判，虽然也会用于谈判，但从结构上来说，这将是持久的，因为他们想要进行大规模的经济秩序改造。我会在下面留下我参考的文章链接，大家可以阅读。我认为在货币方面可能存在一些概念错误，但那不是我的专业领域。不管怎样，这就是我今天准备的内容，非常感谢您的收听。