Xi's visit a hard reality check for EU-China relations - Asia Times

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President Xi Jinping’s Continental tour, his second in five years, has shown how many EU member states, at least those in the base of Europe, need a real test.

Xi chose to travel to his most fervent Western allies, Serbia and Hungary, as well as his long-awaited neighbors beyond France.

Xi targeted President Emmanuel Macron with a significant amount of attention because he has just criticized Russia’s war in Ukraine and supports the EU’s proper independence and financial security plans. These final two efforts are primarily focused on China.

On the original, China’s established markets with Russia are at a record high. China has consistently abstained from UN resolutions that condemn Russia’s anger against Ukraine.

In addition to offering attractive cut-rate charges, China also offers economic and financial aid for Russia, such as its exports of Russian oil and gas. ( India has also consumed Russian energy that is approved by the West. )

Most important of all, China is officially Russia’s main external vendor of everything, from trucks to cards to drones.

As US Secretary of State Antony Blinken warned during his recent journey to Beijing, for Chinese imports run the risk of being actually classified as “dual-use” or plainly defined as weapons.

Macron warned Xi in a similar way. Just three Chinese firms that have been fined by the EU for supplying dual-use systems to Russia so far, compared to a much longer list of US companies.

When he met Xi at the Elysée, Macron met with European Commission President Ursula von der Leyen by his side regarding EU financial security. She reportedly addressed every aspect of China’s economic model, not the least of which is its large industrial policy that has resulted in excessive capacity.

After years of fruitless attempts, EU officials appear to have changed their focus from facilitating market access for EU businesses to preventing overcapacity in China.

Xi’s response: The EU does not anticipate any pleasing measures because China simply has a sizable advantage in terms of comparative advantage brought on by innovations and economies of scale. &nbsp,

Macron, however, believes that having Chinese EV producers produce in Europe, which Xi sounded to be in favor of on behalf of Taiwanese businesses, as do many different European leaders.

The agreement is certainly spruced up by the fact that the most recent Chinese EV plant in Spain will come with EU subsidies. However, where the value added will be generated ( since 40 % of EVs ‘ batteries are mostly produced in China ) will need to be questioned.

Notably, China can establish factories in the EU to avoid the anti-subvention duties that would apply to imported Taiwanese EVs if the EU’s continuing anti-subvention investigation so desires. &nbsp,

Macron and Von der Leyen’s European tour will include even more telling stops in Serbia and Hungary during the next leg of Xi’s Western trip. More can be anticipated when Xi meets Hungarian Prime Minister Viktor Orban, who is friendly with China, at the 25th anniversary of NATO’s attack of the Chinese Embassy in Belgrade.

There is no way Macron may have resolved his meeting or warned Xi, and China’s support for Russia will certainly proceed. Judging by Xi’s opinions, the same is true for what the Union sees as China’s business overcapacity. &nbsp,

Macron’s fact check will likely come from Von der Leyen’s final” I told you so,” but for the time being, Xi’s journey has failed to quell the chorus of concerns about China’s risk.

The EU is in a distinct attach as it eagerly awaits the outcome of the November election between Joe Biden and Donald Trump. &nbsp,

Bruegel’s senior research fellow and Natixis ‘ chief economist for Asia Pacific, Alicia Garca-Herrero.

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Commentary: A surprise South Korean boom is going unnoticed

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Hopes OF A Economy HAVE DIMINISHED

Economists had a year ago confidently predicted multiple cuts beginning in the late 2023, but it did n’t look that way. There was even a possibility of crisis.

Hopes of such a downturn have considerably diminished. The central bank is concerned that the prices is getting more and more persistent, and that a protracted greenback has weakened Korea’s fought, its currency. This unfortunate outcome of strong economic conditions in America and a decline in the Fed’s willingness to make first cuts have a ripple effect across global markets.

” I would n’t call it starting from scratch”, Bank of Korea Governor Rhee Chang- yong told reporters recently. ” But the situation has changed”.

This financial boom has no benefit to President Yoon Suk Yeol, either. Voters in Yoon’s hard-right laws drew a disproportionate blow to his party in parliamentary elections next month. Social scientists declared his principle over with only a few years left in his name because of how devastating the bloc was.

Investor- pleasant policies championed by Yoon, like strong cuts in funds- gains tax and union busting, may struggle to find traction. The typical Korean has yet to go through a better time. On either side of the divide, a consumer sentiment score that measures the dominance of optimism or pessimism, has remained undetermined.

Not necessarily translating to joy on the streets for Samsung Electronics and Stat Hynix. Higher levels of debt and worries about injustice have accompanied the country’s progress in new decades- and inspired Netflix’s hit Squid Game and, a dozen year’s earlier, the Oscar- successful film Parasite.

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Xi's big adventure to keep Europe open and onside - Asia Times

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When Chinese President Xi Jinping next visited Europe, the world economy is now a much different area than it was five years ago.

Since 2019, a pandemic wreaked havoc, Joe Biden was sworn in as US president, Russia invaded Ukraine ( which Beijing tacitly backed ), German Chancellor Angela Merkel stepped aside, the US Federal Reserve carried out its most aggressive tightening cycle since the mid- 1990s and the European Union ( EU) is threatening new tariffs on Asia’s biggest economy’s exports.

With all of this, Xi has performed one of his most difficult balancing acts in his ten years in power. His swing through France, Serbia and Hungary comes as concerns about Beijing fueling Russia’s war machine collide with Xi’s need to tap Europe’s electric vehicle ( EV ) market, convince the West that Chinese “overcapacity” concerns are overdone and that China’s property crisis wo n’t be the cause of the next global financial crisis.

All of this while avoiding falling into a wider trade dispute with a crucial economic union due to China’s post-Covid recovery’s producing boom.

But there has been a significant change over the past five decades. When Xi last visited, China’s gross domestic product ( GDP ) was roughly the same size as the EU in US dollar terms. Today, it’s about 15 % bigger.

” The cyclical setting of Europe and China items to the business balance turning in China’s prefer”, says Cedric Gemehl, scientist at Gavekal Dragonomics.

At the same time, nevertheless, EU place demand is showing signs of recovery, which could be a benefit for China- made merchandise purchases.

The eu economy ultimately experienced some significant development in the first quarter of 2024, according to ING Bank economist Bert Colijn, following a long period of stagnation since the power crisis first started in the second quarter of 2022. A more robust power source and a significantly lower cost of ownership, which in turn lower inflation, make up the economy. Pay growth, in turn, has accelerated to make up for lost buying energy, which is now benefiting consumers”.

The EU has the upper hand, according to some economists, as China is under more US force, including restrictions on investments in island companies.

One great disclaimer: the EU’s 27 people are all over the place on China relationships. Some people complain about Beijing supporting Russia’s military business, people about China’s subsidies for EVs and clean energy industries, and still others about human rights concerns. All of the above are irritable to some.

It’s no accident that Xi’s timetable begins in France. Xi met with French President Emmanuel Macron, who may appear to be a fellow traveller, three days after German Chancellor Olaf Scholz made a trip to China.

Macron’s need for Europe not to become a “vassal position” of the US makes him Xi’s best guess for cajoling the legislation course in Brussels. A significant overlap in the Venn diagram for Beijing and Paris is the argument that Macron made frequently and first for” proper freedom” from Biden’s Washington.

But challenges abound. One is Macron’s desire to protect France’s economy from a wave of low island products and exports of EVs and other natural products, which Brussels claims are funded by “unfair” authorities subsidies.

Another: Xi’s attempts to downplay China’s support for Vladimir Putin’s exploits in Ukraine ( Macron has floated the possibility of a French deployment there ).

” Xi will use his day with Macron to downplay China’s continued support for Putin’s war machine”, said Matt Geraci, an associate producer at the Atlantic Council’s Global China Hub.

Russian President Vladimir Putin and Chinese President Xi Jinping pancakes one another. Photo: Asia Times Files / AFP / Zuma

Macron also is n’t thrilled by Xi’s choice of stops after France. According to reports from Western media outlets, Macron hoped to maintain the focus on Franco-Chinese ties rather than Serbia and Hungary, which are Russia-friendly.

Eastern European powers, including Macron and Scholz, are concerned that Xi’s time spent in pro-Kremlin lines, which he claims, violates broader EU legislation signals. The problem, of course, is the extent to which those prevents squander any kindness Xi may acquire in Paris.

Of course, Xi can be quite talented at pitting Western countries against one another in front of the wider EU union. Take, for example, the Germanic party’s April trip to China, notes Rolf Langhammer, top scientist at the Kiel Institute. ” Scholz largely followed the quarrels of European business”, Langhammer says.

” For instance, that low-cost Chinese upstream items offer both cost advantages for domestic business and encourage European consumers and processors to get environmentally friendly goods,” for instance. European businesses worry about reprisal if China is subject to import tariffs from the EU, he added.

These arguments, according to Langhammer, are natural from a macro perspective. However, they disregard the well-founded issues raised by the EU Commission regarding the anticipated surge of Chinese imports into the EU’s single market, which is currently the only available market in the world.

Of Xi’s vacation this year, Mathieu Duchatel, senior colleague at the Institut Montaigne, observes that “diplomacy only is unlikely to produce substantial outcomes in EU- China relations, as this explore may once again underscore. Those looking for a more realistic way to address trade, technology, and investment relations between the EU and China should turn their attention to the EU’s evolving economic security agenda.

According to Duchatel,” a lot still needs to be done.” Without economic intelligence, the difficulty of developing a European economic security agenda is demonstrated by the difficulty of establishing a supply chain resilience challenge. Successive crises have exposed weaknesses in Europe’s supply chains. Private companies and individual member states have primarily taken steps to reduce these risks, though.

The European Union’s efforts to address supply chain flaws have not yet produced significant results, according to Duchatel, despite its own economic intelligence capability. The European Commission must combine and analyze strategic information on a scale greater than that of individual member states and private entities in order to effectively address this challenge. The Commission would gain from all EU countries and European businesses by becoming a key player in supply chain resilience decisions.

In the interim, EU President&nbsp, Ursula von der Leyen is&nbsp, raising the temperature with a slew of trade restrictions against Xi’s Communist Party. In part, the effort aims to fulfill her commitment to improve Brussels ‘ impact on the world. Part is aimed at assessing the broader costs of China’s subsidies for EVs and its support for wind parks, solar manufacturers, railway firms and medical devices.

” We recognize what we see as the Chinese playbook” ,&nbsp, Margrethe Vestager, the EU’s competition chief, tells Bloomberg. Knowing that you have been played teaches you to be much more watchful and take better actions.

Vestager says that” we are fully utilizing our trade tools and our tools that come with the foreign subsidies regulation to restore fair competition.”

The so-called “external subsidies regulations” are intended to protect against state funding that causes unfair competition for public tenders and deals to the detriment of European businesses.

Last month, Vestager’s team unveiled a subsidy investigation into China’s involvement in wind parks in Bulgaria, France, Greece, Romania and Spain.

The extreme uncertainty surrounding geopolitical tensions, according to economist Maartje Wijffelaars of Rabobank International, has made the year 2024 even more precarious.

” The main question is”, says Wijffelaars, “where will it end? Solar panels, wind turbines and medical devices have also’ recently’ caught Europe’s attention”. China is essential for its desperately needed energy transition, but also because it needs both as an export market and as a resource.

In Yantai, China, a worker installs polycrystalline silicon solar panels as terrestrial photovoltaic power. Photo: Twitter Screengrab

Yet Xi’s real challenge, let’s not forget, is China’s economy back home. At a time when youth unemployment is at its highest level, the cratering property sector is still putting downward pressure on deflation. Municipalities, meanwhile, face crushing debt loads, including US$ 9 trillion of so- called local government financing vehicles ( LGFVs ). That’s double the size of Germany’s economy.

The trade concerns will “undoubtedly” be a key discussion point, particularly since China is grappling with a slowing economy, says Leonie Allard, a visiting fellow at the Atlantic Council’s Europe Center.

The weak yen also makes Xi’s 2024 difficult to read. The currency’s 10 % drop this year is affording Tokyo a trade advantage that China is n’t enjoying. Xi’s economy could, of course, embolden the People’s Bank of China to push the exchange rate lower.

It would be a risky gambit, triggering a broader currency war. A decade of efforts to increase the yuan’s use in trade and finance may be slowed down by doing so.

Property developers who have a lot of offshore debt might face higher default risks as a result of a weaker yuan. In the run-up to November 5, China might become a bigger issue in the US election.

The key is addressing the real estate crisis, strengthening capital markets, boosting private sector size in comparison to state-owned companies, and creating bigger social safety nets to encourage more money and saving it.

Premier Li Qiang is back in Beijing as Xi rounds the European markets, leading efforts to improve China’s economic standing. and overcoming difficulties, albeit temporarily, that Xi might find appealing because of his isolation.

Follow William Pesek on X at @WilliamPesek

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Eating old rice not stunt to get Yingluck retrial, says minister

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On the American marketplace, long-stored pledged grain may be sold.

PUBLISHED: 7 Perhaps 2024 at 14: 27

Eating old rice not stunt to get Yingluck retrial, says minister
Commerce Minister Phumtham Wechayachai, top right, eats a dish of older, pledged corn in Surin on Monday. ( Photo: Ministry of Commerce )

Phumtham Wechayachai, the minister of commerce, stated on Tuesday that his decision to sell decade-old grain pledged and stored under former prime minister Yingluck Shinawatra’s management and to make a show of eating it was not intended to get her a retrial.

On Monday, Mr. Phumtham responded to reporters ‘ inquiries at Government House regarding his journey to two wheat stores in Surin province.

” That is not my goal. I am responsibility- bound to buy the stored grain… The]Yingluck ] case is not part of my job”, Mr Phumtham said.

The business minister, who is also a deputy prime minister, showed up on Monday at two rice warehouses in Surin, showing that the rice that was kept it for ten years under the Yingluck government, has continued to be edible. In front of investigators who were with him, he consumed cooked wheat from the stores.

Mr Phumtham, a deputy head of the decision Pheu Thai Party, admitted the color of the corn had changed&nbsp, and it was full of dust. But, it could be washed in waters up to 15 days before cooking and then it would be ready for use.

He claimed that after eating the grains the day before, he had no stomach issues and that the design of the particles remained wonderful.

He planned auctions of the pledged corn within the next month, and said the corn could provide the older- rice&nbsp, markets in Africa.

The largest wheat market treatment program in Thai past was the Yingluck rice-pledging system, which ran from 2011 to 2014.

The state purchased grain from farmers for the first time ever for an unlimitable amount of rice at an all-time high price throughout the plan. It&nbsp, resulted in losses&nbsp, totalling hundreds of billions of ringgit.

Yingluck fled the nation in 2017, just before the Supreme Court handed her a five-year prison sentence for failing to stop the government’s sale of corn through her rice-pledging system, which is plagued by fraudulent and corrupt government practices.

Her elder brother, who was once perfect minister, said last month that he believed Yingluck would be able to make a national appearance this time.

Thaksin returned&nbsp, in August next month. In February, he was given a new prison expression and released on parole.

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Fed independence key, despite Trump advisors' view - Asia Times

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Let’s face it: every senator aspires to the Fed’s authority to set interest rates. Let’s get real before we discuss the ideas Trump officials are hatching to abandon that authority.

Donald Trump would n’t be the first to attempt to snag some of that power. Harry Truman, Lyndon Johnson, and Richard Nixon were his forebears in the creation of the initiative.

Yet those president who sat silently while the central bank raised or declined to raise interest rates certainly winced. High interest rates may lose votes. No leader wants them.

Neither would farmers, ranchers and various business loans. If taking away the Fed’s independence keeps interest rates low, then, is n’t that a good thing?

Let’s start by acknowledging that the Fed is n’t completely independent. Congress created it in 1913 and what Congress does, Congress can remove. In 1978, Congress changed the Fed’s going orders, mandating that it do peak work as well as price security.

Also, elected leaders determine who serves on the Federal Reserve Board. The Senate confirms the governors ‘ appointments, and the senator nominates them.

But previously confirmed the rulers serve 14- yr terms, which gives them a substantial degree of independence. They can only be removed for a specific reason, and not because the leader or Congress disagree with their plan choices.

And that’s not the Fed’s just protection from elections. The Federal Open Market Committee, the agency that determines monetary policy, has another structure. The FOMC’s seven administrators are elected by private businesses that are Federal Reserve System members, and they are presided over by five president of the 12 Federal Reserve institutions.

Politicians can and do show their differences with the available- market committee’s decisions, occasionally in warmed terms. But that’s all they can accomplish, aside from the nuclear option, to drastically alter the entire central banks program. Our financial politicians have the freedom to make controversial decisions without having to lose their jobs.

Why does the US protect its social decision-makers from political meddling on this basis? Often high interest rates are important, without them inflation may spin out of control.

But even when they are needed, imposing them requires a degree of political confidence not ordinarily required of those who must face the public every two, four, or six years. Better to assign their 14-year words to appointed professionals.

It’s not just the US that has come to this conclusion. For the same grounds, the majority of nations have quasi-uniform key banks.

What Trump’s officials are allegedly considering falls under the nuclear-options umbrella.

According to The Wall Street Journal’s Fed writer Nick Timiraos, the president had been consulted on attention- level decisions. White House assessment of final restrictions would be done. The Treasury do monitor the Fed’s choices regarding emergency lending.

Oh, and Trump did take Jerome Powell’s place before his 2026 expression as head of the Fed. Powell was appointed chairman by Trump, but he expressed disappointment at the Fed’s subsequent rate increases during his administration.

Unless Congress went on, the propriety of all this is controversial. There would almost certainly been dispute. It would n’t be surprising if the courts derailed the proposals.

The first step may likely be in the financial industry. They’d put a meltdown. To know why, it’s good to join four information:

  • The Fed sets brief- term interest costs. Long-term charges are determined by supply and demand in the bond business.
  • Tie costs and bond yields move inversely. For example: If you’ve bought a$ 1, 000 bond with a 5 % interest rate, your interest income is$ 50 a year. If the market price of the bond falls to$ 500, the buyer still gets$ 50 a year, but$ 50 is n’t 5 % of$ 500. It’s 10 %. As the grant’s rate falls its supply rises.
  • Inflation is good for consumers and terrible for collectors, because the loan ( friendship, in this case ) gets repaid in depreciated money.
  • When the relationship industry sniffs inflation, the resulting pullback may cause economic chaos. Among other things, stocks often plummet, also– the higher yields create bonds more beautiful as expense vehicles– and the higher yields make the government’s debt jump.

Investors see reckless economic policy as a barrier because of the Fed’s independence. They worry that even when economic conditions demand that interest rates be set at a high, politicians will continue to set them small. Fugitive inflation is a serious danger, that is, if lawmakers are setting interest charges.

Odds are higher, in other words, that an attack on the Fed’s independence had really cause a lengthy- term bond selloff.

This is why these proposals are n’t a good thing, even for business loans. They fail to account for the crucial role that the businesses play in determining interest rates. The White House would probably remove them due to financial chaos. For producers and landowners, there’s also the problem that when bond yields jump higher, but would mortgage rates.

According to Timiraos, the proposals Trump’s advisors are plotting have n’t yet received the candidate’s blessing. It will be better for the economy, owners, the national debt and business loans if they never do.

Past lifelong Wall Street Journal Asia journalist and editor&nbsp, Urban Lehner&nbsp, is writer professor of DTN/The Progressive Farmer.

This&nbsp, content, &nbsp, initially published on May 3&nbsp, by the latter news business and then republished by Asia Times with authority, is © Copyright 2024 DTN/The Progressive Farmer. All rights reserved. Follow&nbsp, Urban Lehner&nbsp, on&nbsp, X @urbanize

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Australian winemakers navigate impact of thawing trade ties with China

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HUNTER VALLEY, Sydney: Like fellow wineries across Australia, Mr Bruce Tyrrell has had a strong three times.

Grapes like his lost a total of US$ 1.2 billion in business when China successfully imposed tariffs of up to 218 per share in 2020, putting an end to Australia’s wine industry.

Mr. Tyrrell’s community has been operating the orchard since 1858, which was a huge blow. &nbsp,

” The industry has suffered a lot of damage.” About a fourth of American wine was exported to China. It was the most beautiful industry. All was riding the dragon”, said the managing director of Tyrrell’s Wines.

Australia is currently experiencing a glut of wine, with vehicles and containers holding up the equivalent of 3 billion jars. &nbsp,

Even though most grapes have discovered new markets, it will take time to change that much investment. The majority of these businesses are much smaller than China.

” In the last 12 months, we’ve opened six new businesses. However, the six of those businesses put up are not as big as China”, Mr Tyrrell told CNA.

The tariffs were ended by China in late March, giving American wine producers a long-awaited relief after three years of punishing taxes.

While the shift has been great news for the country’s grapes, concerns remain on the future of business ties between the two nations. &nbsp,

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All investor eyes on Xi in Europe - Asia Times

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In light of rising trade tensions between China and the European Union ( EU), President Xi Jinping’s two-day state visit to France, which begins on Monday and includes stops in Serbia and Hungary, is receiving significant attention from global investors. &nbsp,

Traders are closely monitoring Xi’s journey as the EU continues to investigate alleged market-different practices by Beijing and its electric car operations and a concurrent Chinese anti-dumping investigation involving German wine and agricultural products, with many hoping for de-escalation and cooperation. &nbsp,

The financial stakes involved are large. With strong bilateral trade and investment relations, China and the EU are both significant global economic juggernauts. &nbsp,

Their trade disputes will have a ripple effect across international markets, affecting different sectors and investor portfolios. &nbsp,

Global investors are eagerly awaited Xi’s visit because good developments may help to lessen market uncertainty and reestablish trust. The same effect might be caused by adverse developments.

Facilitating softer trade flows and reducing trade frictions can lead to improved market predictability and investment-risk reduction. &nbsp,

In the event that trade hostilities can be resolved, Western investors looking to invest in China may experience greater clarity and clarity in their business operations. &nbsp,

In addition, fewer regulation and trade restrictions may be present for Chinese investors looking for opportunities in Europe, creating a favorable trading and investment environment. &nbsp,

To be sure, Xi’s political visit holds value beyond business considerations, as it underscores China’s broader corporate objectives and political leanings. &nbsp,

China’s involvement with Europe is related to its Belt and Road Initiative ( BRI), which aims to improve connectivity and promote economic cohesion throughout Eurasia and beyond. &nbsp,

By cultivating closer ties with Western nations, China seeks to advance its political passions, increase its impact and exposure new markets. &nbsp, For worldwide investors, Xi’s explore signifies feasible opportunities for involvement in Tribal- related projects and infrastructure development.

Trade problems can be resolved through dialogue and negotiation in a time when isolationism and unilateralism are in high demand. &nbsp,

Beijing’s top-level discussions with European rulers give them an opportunity to restate the value of internationalism, uphold global trade standards, and promote a rules-based trading system. &nbsp,

A commitment to ending trade tensions through diplomatic stations may result in a more stable and predictable funding environment that would support long-term planning and risk management, according to investors.

In a time when there is growing worldwide fragmentation and business separation, Xi’s visit will definitely have an impact on entrepreneur perceptions and market sentiments.

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Moneythor welcomes Martin Frick as new CEO to drive strategic growth

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  • Co- creator, Olivier Berthier did transition to the part of chairman
  • Frick boasts three decades of experience that has helped his company succeed in powerful markets.

Moneythor welcomes Martin Frick as new CEO to drive strategic growth

Martin Frick has been named as Moneythor’s new chief executive officer, the industry leader in all-in-one personalization alternatives for financial institutions. Sequentially, Olivier Berthier, the inc- founder of Moneythor, did transition to the role of chairman, continuing to deliver essential guidance and support to the organisation.

This change in leadership is important for the company’s evolution and comes at a time when Moneythor is expanding and expanding, thanks to the acquisition of many clients in new markets and regions.

Frick has considerable knowledge and a proven track record of fostering organizational success in active and dynamic markets with a career that spans more than three decades. His career includes significant roles such as managing producer, Asia Pacific, at market- leading software firms Temenos and Avaloq. Most recently, Frick led his personal advisory firm, Amsantix Pte Ltd., assisting tech firms in weighting and achieving sustainable development.

In his position as CEO, Frick will rely on accelerating growth, developing technology, and strengthening Moneythor’s status as a market leader in the financial services customization area.

Berthier, who has played an instrumental role in founding and shaping Moneythor since its inception, will assume the position of chairman. He will continue to contribute his industry expertise and strategic insights to the company’s long-term strategy and direction. &nbsp,

As chairman, Berthier and Martin will collaborate closely to ensure a smooth transition and upbeat momentum.

Berthier’s optimism about Frick’s ability to carry Moneythor through this next stage of development was expressed when he spoke about the leadership transition. He remarked,” I’m proud of what we have accomplished at Moneythor over the past eleven years. I have full confidence in Frick’s leadership skills and future vision as I transition to the chairmanship. Together, we will continue to drive innovation, foster growth, and deliver exceptional value to our customers”.

Frick continued,” It’s a great time to be a part of Moneythor’s journey,” adding,” I’m honored to be a part of it.” Under Berthier’s leadership, Moneythor has achieved great success and built a strong foundation upon which I look forward to growing. Together, we will chart a course for continued success and solidify Moneythor’s position as a leader in the financial services space”.

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Debunking China's overcapacity myth - Asia Times

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China has spent the past four years shifting its bulk of its exports to the Global South aside from developed areas while also creating production facilities that re-export to developed markets, avoiding America’s 25 % tax on the majority of Chinese products and other developed-market trade barriers.

There must be some trickery behind China’s trade progress, according to the black murmurings of American economics: China is in recession, so it’s selling products on the cheap.

The Wall Street Journal wrote in May about “foreign officials concerned about a duplicate of the China impact of the first 2000s,” in which pro-market measures in China and its membership in the World Trade Organization fueled an export boom that helped users but defied competing companies in the US and elsewhere.

The dollar’s real loss “is obviously contributing to higher export” from China,” said&nbsp, Krishna Srinivasan, chairman of the Asia and Pacific section at the International Monetary Fund, told the WSJ. True loss means that after prices, the money has become cheaper.

The problem with this reasoning is that China’s real effective exchange rate ( its swap rate adjusted for inflation ) has risen more than fallen, according to the Bank for International Settlements, from an index levels of 50 in 1994 to a degree of 90 immediately. It dropped slightly over the previous two years, but not nearly as much as the Japanese yen.

Graphic: Asia Times
Graphic: Asia Times

Moreover, Japan’s exports stagnated despite the sharp fall in its inflation- adjusted exchange rate, while China’s leapt. That’s an appropriate comparison because China and Japan compete directly in the world’s largest industry, namely automotive.

China exported 5.22 million passenger cars in 2023, a 57 % jump from the previous year, while Japan—previously the world’s largest auto exporter—sold only 4.22 million, a 16 % increase.

China’s cheap electric vehicles ( EVs ), including the US$ 9, 500 BYD Seagull, fill a demand for low- cost, reliable small cars in the Global South.

Henry Ford’s Model T appeared in 1908 with a price of$ 850, roughly America’s per capita GDP at the time—the right price point for a mass- market vehicle. China’s EVs meet a similar price point in the Global South.

EV prices have dramatically decreased because of significant scale economies of scale in vehicle production rather than currency fluctuations. More industrial robots were installed in China last year than were installed globally.

Ford’s$ 850 Model T of 1908 sold for just$ 250 in 1925 thanks to economies of scale. In a short period of time, China has accomplished what Ford did.

The pattern seems to apply to other sectors as well. A Huawei 5G base station sold for$ 57 in 2020, according to reports, but only$ 13 per unit was reported for a sale to China Mobile last year. Huawei does not publish price data for 5G infrastructure.

The remarkable thing is that China’s exports to developed countries have n’t changed much in the last four years, while exports to the Global South have increased by a whopping 40 %.

Graphic: Asia Times

Meanwhile, US imports from the Global South rose in tandem with China’s exports to the Global South:

Graphic: Asia Times

From the charts, it is obvious that China’s exports to the Global South have enabled higher exports to the United States and other developed markets.

China, in other words, is building infrastructure and manufacturing, not simply flooding the Global South with cheap consumer goods. For poor countries with low rates of entrepreneurship, an auto is a capital good that allows small businesses to make deliveries.

I came to the conclusion that the Communist Party of China, through the construction of mobile broadband networks throughout the Global South, has fostered an unprecedented wave of entrepreneurship in the developing world in a study released in November 2023 for the journal American Affairs. The notionally communist party has since become the record’s most effective propagandist. This conclusion is richly supported by data on broadband usage, business formation, and eco­nomic growth.”

According to all the available data, China’s impressive export performance is attributed to investment in robotics and AI applications.

Follow David P Goldman on X at @davidpgoldman

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