China is now dumping wheat purchases from the USA, pork
from the EU and increasing brandy tariffs against France in particular.
Macron pretended not to understand why China increased tariffs on
brandy, same as China not understanding why the EU increased tariffs on
EVs, LOL.
On the other hand, I think Brazil, Argentina and Russia
understands perfectly why China is buying more from them and they are
increasing their production, expecting more prosperity inspired by
Chinese demands. Brazil and Argentina are expanding their grain acreage
to cater to increase Chinese buying. Russia too is increasing its grain
production and increasing pork production as well for the Chinese
market. Everything is fitting in nicely with China taking a stand that
is benefitting these three countries and strengthening its food
security.
Indonesia will be next to benefit from Chinese
agricultural substitution. And I would think Prabowo knows who is going
to butter Indonesia's bread going forward. Even less knowledgeable beans
like us knows how to separate the wheat from the chaff. Leaders have
all the advisors to chart their decisions, but. I honestly am not
talking about the USA or EU, where advisor's decisions have done more
harm to the country than without them. Laughable really!
Anonymous
3 comments:
What all this means is all tied to de-dollarization moves. Simple logic it may seem for a country to diversify its food and other imports to more countries, which no one can accuse China of doing. But underneath the surface, the objective is about using less of the US$ and making use of local currencies between trading partners and even exchanging oil for consumer products, without having to use the US$ in cross border trade.
That is making everything cheaper and settlement faster. Rather than having to convert local currencies into US$ to settle trade and having to pay a fee for currency conversion to and from the US$. Those who use credit cards will know, but how many ever consider how much exchange losses they are incurring? How stupid the world had been led to follow a system that had screwed them for decades, benefiting big USA banks.
What is even more satisfying is that such trade under BRICS setting up its own commodity exchange is beyond the scrutiny of the USA, as no US$ is being used enabling the USA's ability to monitor who is trading with whom. And what this will do to the USA and the West is the inability to cater to demands which they are unable to monitor and influence the market.
The formation of BRICS initially was just brushed aside as inconsequential and unable to do anything to the entrenched US$ hegemony and settlement system. The development of a BRICS system is now posing a threat to the US$. They have taken their eyes off BRICS, like taking eyes off China for three decades, and are now trying to correct a massive mistake that is now impossible to contain.
Trump said in no uncertain terms that the USA had ignored the de-dollarization move for years and he is now going to punish countries that are dumping the US$ with tariffs. Desperation? It is not going to work. Tariffs work against the implementer or its own citizens. Nothing more.
Countries have to hold US$ in reserve in order to be able to conduct trade. That is another constraint and a rope around their necks. They have to keep buying and holding US$ in reserve for oil, which is one of the most essential commodities that runs every country's economic activity. Without oil, vehicles cannot move, planes cannot fly, trains cannot run, lifts cannot work, air conditioners become white elephants, offices cannot function, household equipment like fridges cannot do its work of keeping food fresh. That is how important oil is and how the US$ exerts its hegemony on the rest of the world.
China is moving fast and furious into renewables. China is now the world's biggest hydro-electric generating country, the biggest solar energy electricity generator, the biggest wind energy electricity generator, the country with the most EVs that are relying less and less directly on fossil fuel.
If we think rationally, China is using the sun's energy directly to generate electricity in all its three alternative sources of electricity generation, rather than relying mainly on coal or fossil fuel derived from decomposing trees and other organic substances, taking hundreds of years to grow using energy from the sun and needing thousands of years to turn those decomposing trunks and organisms into coal or fossil fuel. Those are exhaustible commodities; abundant they may be today.
Dams hold back water for electricity generation, the direct result of the sun causing evaporation that turn into rain or accumulated as glaciers on mountains, whose melting under higher summer temperatures provide the water for those dams to generate electricity. Solar panels need no explanation, using direct energy from the sun and converting it in electricity immediately. Wind turbines also need little elaboration, using winds generated by the sun's energy moving air between hot and cold regions to create wind energy. And these are inexhaustible and freely available everywhere in the world, save for the poles.
There are now experiments using ocean waves for electricity generation, another renewable energy worth exploiting. And China is experimenting with small nuclear energy generating equipment that may one day surprise everyone over its availability and affordability.
On the other hand, the USA and the EU are stifling the use of renewable energy by curbing EV growth. Trump is a big fan of fossil fuel and a big hurdle against renewables. He already said that climate change is a hoax. Another lie to be exposed?
Germany's Baerbock is following the American's playbook by attacking China before visiting China. Would stupid China still welcome her to China, to scold China?
This is a very bad example China is setting, as good as saying, you can scold China and still be welcome in China. So, more American and western leaders would take this as an approval and would continue to scold China and believing that they would be welcome in China.
Stupidity has no cure.
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