China-Africa bilateral trade is whopping $250 billion. That’s 5x the US-Africa trade.
Every one of the 54 African countries has signed up for the Belt and Road Initiative (#BRI).
China builds highways, railways, seaports, airports, schools, hospitals, telecom networks, hydropower dams etc. in Africa.
America builds… MILITARY bases.
China brings its development philosophy to Africa. And actions matched by words.
USA/EU don’t have the patience for this kind of engagement.
Every three years, African leaders fly to Beijing for the #FOCAC summit. And every country - small or big, rich or poor - gets a grand reception and full attention.
Serious business and detailed planning. No slogans or fluff.
An excellent project of #FOCAC: China provides satellite TV to 9,200+ remote villages, directly benefiting 180,000 households and nearly 10 million people!
🧵 Can Save Trump Save the Dollar with Threats Against BRICS?
I cannot remember Trump ever talking about BRICS, but the first time he did was to threaten the multilateral organization with 100% tariffs, if it creates a BRICS currency.
Why?
America’s prosperity depends on the “exorbitant privilege” of USD
This allows US to run massive budget and trade deficits every year.
Trump knows it.
"If we lose the global reserve currency status of the dollar, we will become a third-world country! "
In the past, US deep state & military would stage coups, assassinate leaders or invade countries if anyone decided to walk away from the dollar – Iraq and Libya, for example.
So much for freedom, choice, sovereignty, free trade, rules-based order, and free-market capitalism.
Let’s put this fantasy to rest once and for all. There are two types of Americans who would wish to decouple from China:
💠Warmongers who know they cannot start a war with China, if the US economy is dependent on the geopolitical rival.
💠Those who wish to reduce US’ trade deficit and bring manufacturing back.
However, here are the reasons why trade wars with China are not easy and cannot be won:
1) This has been tried for the last 8 years with Trump tariffs, Biden tariffs, sanctions, friend-shoring and re-shoring. US imports from China have been stubbornly hovering around $450 billion a year since 2016. (see chart)
2) Note that this $450 billion translates to perhaps $4 trillion of sales and millions of retails jobs within the US economy. Like, how Trump pays $3 for a bible printed in China and sells it for $30!
3) There are many products for which China accounts for 50-100% of the US imports. It has been impossible to find alternate suppliers.
Some of these products include critical minerals and medicines, which are indispensable for normal functioning of US economy. Simply imagine the riots in the US if the shelves in Walmart, Target etc. are empty.
4) While the US has greatly increased imports from Mexico, Vietnam, India etc., guess what? Those countries buy intermediate goods from China, assemble them into final products, and export them to the US.
Thus, the supply chain is still dependent on China.
Americans are simply buying Chinese goods through a third party. This is why China’s exports to those countries have increased a lot since 2018. Fact is that nobody can match China’s scale, speed, price and quality. (see chart)
5) Companies like Apple and Tesla cannot survive without China. Those two companies have a combined market cap of $4.5 trillion!
Consider that one-third of all Tesla cars in the world are made in Shanghai; and 80% of iPhones are still assembled in China.
Then, there are companies like Starbucks, KFC, McDonald’s and countless American retail, fashion and hospitality (hotel) companies for whom China is the #1 or #2 largest market in the world. Same holds true for US tech giants like Qualcomm and Nvidia.
The S&P 500 companies earn $1 trillion from annual sales within China.
As Tim Cook said today, “We (Apple) cannot do what we do without China.” Heck, even the US military industrial complex depends on China – as Raytheon’s CEO admitted that his company depends on thousands of Chinese suppliers.
6) All the allies and vassals of the US are also highly interconnected with China. For Europe, Japan, South Korea, Australia etc., their #1 trade partner is… China!
7) Finally, the big picture: China is the world’s largest trading nation. It is #1 in manufacturing, #1 in exports, and #2 in imports.
China's primacy in manufacturing will keep increasing. By 2030, China will account for 45% of global manufacturing! (see chart)
China is also #1 in patents and #1 in scientific papers. This is why Europe is now begging for technology transfer from Chinese companies to figure out how to make EV batteries, solar panels etc.
The US could have decoupled from China 30 years. However, now, it’s mission impossible.
Interestingly, as China becomes more independent and catches up in semiconductor technology, soon, the reverse could be possible – that is, China could decouple from the US!
Two more charts:
How China’s exports to Mexico and India have skyrocketed since the US-China trade wars began:
“China is the largest source of imports for 26 of the 59 minerals classified as critical by the U.S. government.”
Furthermore, China supplies 100% of 12 critical minerals for the US!