4/20/2024

China decoupling from the US

 Not many are aware of how important the strategic move that China made in starting the BRI projects. That is why so much demonising moves have been raised against the BRI, by the USA and the West, with debt trap being the most prominently narrated. It carried no water and has been demolished for good. China did not put a gun to the leaders of countries wanting such infrastructure development. They came to China asking for help. No force or coercion from China is apparent. India is voluntarily not on board the BRI and tells the whole story.

China, despite the trade war with the USA, is still accumulating trade surpluses in US$, said to be even more than before the trade war started. Buying US treasuries and bonds, as China usually does, is no longer the only option and a safe investment channel, especially looking at Russia during the Ukraine War. Of course, China already saw the danger even before the Ukraine War and hence started the BRI to diversify its surplus US$. Nor is investing in USA properties and infrastructures safe anymore as it turns out recently. The USA is banning Chinese investments in real estate. Chinese investors are not greatly alarmed by such moves, having turned their attention to Africa, South America and South Asia.

The BRI afforded China the alternative to recycle the surplus US$, channeling them into infrastructure developments all across the world in the form of US$ loans for those countries to develop their economy. It is more or less another version of China lifting eight hundred million of its population out of poverty. China is now doing poverty eradication on a global scale, for the rest of the world left in poverty by the Anglo-Saxon Imperialist Whites. Which sensible leader does not relish progress like what China is showcasing today?

China's loans in US$ for those countries for infrastructures cannot be held hostage by the USA and the West, unlike investments in USA Treasuries and bonds. The USA cannot seize every country's infrastructure developed by China inside those countries. Those infrastructures do not belong to China anyway. And the biggest dilemma befalling the USA is the realisation that China is having those loans paid back in Yuan, which is making the Yuan an important currency for such countries to accumulate going forward. It is another nail in the de-dollarisation coffin.

Anonymous

3 comments:

  1. Whatever and however the USA and the EU wants to fool China with its 'not de-coupling' and 'just de-risking' narratives, it is not going to work. De-coupling is picking up speed and China knows and is ready for it.

    The reality is that such moves by the USA and the EU are already backfiring. Manufacturers and business leaders are not stupid and can see the direction they have to take. Just look at CEOs of USA business Titans visiting China recently. Just look at German manufacturers and businesses relocating to China and Olaf Scholz going to China to take a look at opportunities for more German businesses to possibly move there, not to entice them back to Germany which is suicidal. Just look at Tesla cutting 14,000 jobs in one fell swoop. MacDonalds is suffering as well and closing outlets, technology companies like Intel and AMD are suffering with the Chinese market losing its reliance on them.

    The USA and the EU can go ahead and ban cheap Chinese EVs, and let the population buy expensive cars made by their own manufacturers. The reality is that they cannot compete outside of the USA, especially in the Global South market and in the China market as well. Can such USA EV manufacturers even hope to survive just selling in USA and EU markets alone? Let them sell only in the USA and EU and let their people enjoy their expensive dreams.

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  2. Decoupling is happening and the USA is just conditioning its citizens for the crunch of being deprived of cheap Chinese products. There is no way out for the USA right now. It is between a rock and a hard place.

    Competing with China is out of the question as their energy and labor cost is much higher than what the manufacturers in China are enjoying. Decoupling is thought of as an attempt to lure industries back to the USA and is not working either. The USA is not producing enough skilled workers, like engineers, to cope with re-industrialization. USA may use subsidies to fight its battle, but we know that is not going to help. Even then, they need the market - not just domestically, but globally and in China as well, which it cannot compete with.

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  3. The faster the global south decouple with USA, the better.

    America has nothing more to contribute to the global family.

    May they reach their Civil War 2.0 faster.

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