Microsoft is shutting down LinkedIn in China and this is an example of the US having a poor trade deal with China.

in #linkedin2 months ago



Hundreds of others as well and Microsoft is ending LinkedIn in China over the expectation of being banned.

The US in 2019 imported 472 billion dollars in goods from China.
Up 52% from 2009.
Up 341% from 2000.

China imported 163 billion.
Up 35% from 2010

The US has a massive trade deficit to China, but it’s largely due to the US battling China in a war over physical goods.

America started in agriculture and moved to manufacturing, but the last few decades, the greatest growth has come from what it produces tech, largely online.

Simple example, Netflix which is banned in China.

Netflix made 25 billion dollars in 2020.

Netflix to date has 23 million subscribers in Asia.
A little over 10% of current subscribers.

China is 32% of Asia’s population.

Not even factoring in the fact China is economically better developed over most of Asia, we could expect Netflix to have 7 million more users in Asia at a minimum, if China didn’t ban it.

Netflix charges $5 a month in Asia currently, so that’d be about 400 million a year in revenue going to the United States, if China lifted the ban.

Which seven million Netflix coming from China is extremely low. I wouldn’t be shocked if that number was closer to 25 million the first month into the ban being lifted.

But sticking with the 400 million number, that’s just one company of hundreds.

Facebook can’t monetize China.
Google can’t monetize China.
Microsoft now can’t either.

Obviously people use VPN’s to get passed China’s problems, but that’s a relatively small consumer base and it arguably loses money, due to the ads not being properly equipped for that market.

If a company like Facebook could go to China, it’s likely they’d pass over a quarter billion users there and add 5-10 billion in revenue off of it.

I’ve written on this many times now, but this is the problem with China.

These companies being banned is costing the US economy a minimum of 100 billion dollars a year. The US could with a ban being eliminated DOUBLE the current exports to China.

I love free trade, globalization, immigration and travel, but we can’t just keep buying things China is good at making and let them ban what we are good at making.

And LinkedIn leaving China is just the beginning.

Apple is so tied to China that if they put pressure on them, they could realistically collapse the company with the motion to not allow sales or products there.

This is something completely ignored.

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