US burning bridges, China building bridges

It has been reported that some Western businesses are weighing a return to Russia, after pulling out after the Ukraine War started, forced by the USA administration and its Western allies. There are political hurdles to overcome, and sorry to say, their seat in Russia have now been taken by Russian entrepreneurs and other foreign investors from China. Moving back and winning back market share is out of the question.
The Trump administration is now forcing big financial institutions to move out of China and not providing financial services to Chinese businesses. The USA has already forced the Asian Development Bank (ADB) to act against China by ending loans to China. China should end its membership of the ADB and concentrate resources in expanding the Asian Infrastructure Investment Bank (AIIB). ADB and AIIB are both doing the exact same thing, if I am not wrong.

This pulling out of USA's financially related entities from China will also end up just like what happened to businesses moving out of Russia earlier and trying to find a way back later on. China is still an expanding manufacturing hub in new growth sectors and a market that some cannot do without. Their seat will also be taken the moment they move out. Complete decoupling is going to be a done deal, and China is not prioritizing its dependence on USA anymore. The world is much bigger than the USA alone unlike the past, and the USA is not the only country that others have to trade with. The Chinese market will forever be gone for USA investors after financial decoupling takes place.

Having said that, the Chinese market is also gone forever for USA farmers and is not going to come back, even if relations go back to normal. China has already found alternative sources of agricultural products - from Brazil, Argentina, Russia and other BRICS countries coming on-line like Indonesia, now a BRICS member with Malaysia and Thailand admitted partners and potential members. China is not going to renege on its commitments to those BRICS countries, knowing the USA is not to be trusted.

While the USA is busy cutting off co-operation with allies, China is building more bridges to cushion the blows from the tariffs and sanctions. Who is going to survive and who is going to bite the dust is not difficult to see.


Anonymous