Thread by @BambroughKevin

This is why the usd is going to be in real trouble (vs #commodities) for the next 20 years and why we are on the cusp of a huge #resources bull/boom market

https://twitter.com/vtchakarova/status/1589990520683892736

China makes actual products and sends them around the world running a fairly balance trade surplus/deficit. They’ve spent the last 20 years locking down supplies for their economy. Long term contracting. Company purchases. Cozying up to all sorts of regimes…politics free

At the peak of the last commodity bull China’s exports as a % of their GDP ran up to 30-35% making them very vulnerable to a global slow down and the USA which accounted for ~1/3 of their exports. (Going from memory)

But now China is running around 20% exports vs GDP and USA is only 17-18%. ~60-70% drop in China’s reliance on USA buying goods to support its GDP. This is a huge change over the last 15 years. Bottom line. China doesn’t need the USA much anymore.

I see the relationship evolving to the point where they are nearly just competitors fighting to push inflation to the other while trying to keep inflation low at home. China’s has the ability to acquiring resources abroad in exchange for cheaply manufactured goods.

China will also offers help with infrastructure building, ports, rails and investment/loans. The USA and Europe have been getting squeezed out of the global resource trade. Getting back in the game will be very expensive for the west, take a decade or two and also be inflationary