RANCHO SANTANA, NICARAGUA – Napoleon called her a “sleeping giant.” But now, the big girl is wide awake.
She’s had Covid… and shook it off. Now, she’s back at work… with big plans.
Here’s the latest from Politico:
China was the EU’s main trade partner in 2020, taking the top spot occupied until last year by the United States.
In 2020, exports of EU goods to China increased by 2.2 percent and imports went up 5.6 percent, while EU trade with the rest of the world dramatically dropped (down 9.4 percent in terms of exports, and down 11.6 percent in terms of imports compared with 2019). The pandemic severely hit transatlantic trade, with exports of European goods to the U.S. falling by 8.2 percent year-on-year. Imports fell 13.2 percent.
As a result, the U.S. is no longer the bloc’s top commercial partner and has been replaced by China. EU exports to China in 2020 amounted to €202.5 billion while imports reached €383.5 billion.
And here’s more from the Business Times. For perspective, Donald Trump’s trade wars were supposed to reduce America’s trade deficit – especially with China. Here’s what happened:
US annual trade gap grows to biggest since financial crisis
The US last year posted its biggest annual trade deficit since 2008 as the global health crisis depressed export markets for American companies.
The gap in trade of goods and services widened to US$678.7 billion in 2020 from US$576.9 billion in 2019, according to Commerce Department data. […]
China regained the top spot among US trade partners for goods after finishing behind Mexico and Canada in 2019.
Us Versus Them
China is finding favor with investors, too. Here’s the lowdown from CNN:
Foreign companies are turning their backs on the United States, taking advantage of China’s booming economy and superior management of the Covid-19 pandemic.
Direct investment in the US by foreign companies plummeted 49% to $134 billion last year, according to a report by the United Nations Conference on Trade and Development. By contrast, foreign direct investment in China grew by 4% to $163 billion in 2020.
2020 marked the first year in history that foreign direct investment in China overtook that of the US, according to the UN. China is now the world’s largest recipient of foreign companies’ investments.
Some people will view these facts with alarm. They think we’re in an “Us versus Them” competition with the Chinese. If they win, that must mean we lose, right?
But does it really work that way? If Chinese engineers invent a better light bulb… won’t our days be brighter, too? If they get richer and buy more of our Netflix features… won’t we be better off, too?
If China’s growth brings dangers, it brings opportunities, too.
Chinese billionaires may buy our houses… our malls… and our stocks. They may hire our children as chauffeurs and houseboys… and our ex-military to help them suppress dissenters.
And who knows, maybe smooth-talking Americans will be able to hook up with rich Chinese lovers… like a down-at-heel English aristocrat hoping for an American heiress to save his pile.
The “Yellow Peril” is a useful theme. The politicians, warmongers, fixers, media, lobbyists, think tanks – all love it. It’s another big threat they can protect us from.
And it is a good distraction (along with many others) because it leaves the Elite Establishment large, in charge… and in the money.
But as far as we can tell, the Chinese are not about to invade San Francisco.
Or if they do… it will probably be as part of a UN “peacekeeping” mission, trying to keep Americans from killing each other.
So what will happen in China? Is the country becoming richer and more powerful? Or will central planning and debt soon cause it to blow itself up?
We don’t know.
The Chinese book is a mystery to us… ancient and unfathomable… largely off limits to western eyes.
The U.S. book, on the other hand, is tattered and worn. It’s an old story with an old plot. Oft-repeated, for amusement… and moral instruction… it is a perennial favorite.
Boy meets girl.
Boy spends too much money trying to impress girl.
Boy counterfeits money to try to cover his debts.
Girl goes off with someone who hasn’t made a fool of himself by trying to tell everyone else what to do… someone who is still solvent.
A Chinese guy?
Over the last four years, the U.S. has added $3 trillion in new money (central bank holdings). The Peoples’ Bank of China, by contrast, has added almost nothing.
Here’s how CNN summarized it:
China wants to lead the global recovery from the pandemic and become more influential on the world stage than ever before. It might just have the momentum – and the confidence – to pull that plan off.
“China emerged from the Covid-19 shock earlier than the rest of the world and authorities are already planning for the long term,” wrote Françoise Huang, senior economist for Asia-Pacific at Euler Hermes, in a report titled, “The world is moving East, fast.”
The world can’t really move east. It is a ball. Half moves east. The other half moves west.
But the China story is one for the history books. It has risen from one of the most backward nations on the planet to one of the most powerful and modern – in a single generation.
And what next? How does the story end?
Oh, Dear Reader, you can’t be serious. You’re asking us?
Again, we will have to turn the pages, one at a time, along with everyone else.
But the U.S. story? We think we can skip ahead.
Tune in tomorrow…
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