November 28, 2022

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US-China dialogue / hostile countries can stop the war

And recent events in the world of economics and politics are putting China in great difficulty. For the first time, after eighty quarters during which it secured more than a quarter of global growth, China must admit to a crisis far deeper than any forecast, as unfortunately is happening almost all over the world.

Year-on-year growth will be well below the government’s 4.2% forecast, with April figures showing a 3% drop in industrial production and even an 11% drop in retail sales compared to last year, while the real estate market shows a 47% drop.
At the same time, China is no longer the top destination country for foreign investment and is instead experiencing capital flight. The government is trying to address this even if the magical intervention of increasing investments in infrastructure and construction, which has worked well in the past, certainly cannot be replicated with the same effectiveness and intensity in a country that is now heavily infrastructure-strapped.

Some relief may come from mitigating the effects of Covid, which, in varying degrees, has taken a heavy toll on the lives of Shanghai, Beijing and other important cities in recent months, reducing the economic activity of nearly two hundred million people.

To be sure, Omicron, with its high prevalence, began this tipping point, undermining the containment strategy based on traceability and selective shutdowns.

However, the war in Ukraine has greatly exacerbated the situation and jeopardized the most powerful engine of the Chinese economy, which is the export of more than 1,700 billion dollars of products to the West. Exports to Russia, which have also increased significantly since the two countries formed a strong political alliance, certainly cannot replace them as they only amount to a tenth of this total.
With an impressive increase in trade and investment in Africa and Latin America, and massive political and economic penetration into Asia via the Silk Road, China is trying to free itself from over-reliance on capital markets.

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However, this process takes time: just think that economic relations with Germany alone outweigh those with the whole of Africa.

For this reason, China maintains a largely aloof attitude towards the war in Ukraine and has not, at least for now, even sent a cartridge to help its ally. The repeated assertion that Russia remains the closest of friends, but the borders do not touch, could not be more contradictory. However, this alliance is considered necessary as long as the enmity with the United States continues.
An enmity that is getting more and more intense and seems to be growing more and more in anticipation of the events of November, when the Chinese president will have to be confirmed for the third time in his role, breaking through the rules of power succession that were in place. After Mao’s death, Biden will face the midterm elections, which are particularly difficult for the Democratic Party.

In either case, the escalation of tensions with the enemy number one appears to be helping to achieve the political goal. It suffices to consider the fact that while in the past for the American public, an increase in trade and economic relations was considered a useful element in facilitating China’s approach to Western democracies, all this is now generally considered an element conducive to authoritarianism and autocracy.

The rupture between the democratic world and the rest of the world is thus exacerbated by the war in Ukraine with characteristics which I consider most worrying for the future.
While a numerical majority of countries supported the Western proposal to the United Nations against the invasion of Ukraine, nearly two-thirds of the world’s population, beginning with China and India, expressed their opposition to liberal democracies by abstaining or voting against.
I really fear that a dramatic rift is being built between countries of established democracy and wealth and the rest of the world. Something like “Proletarian states around the world unite”.

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For this reason, the words that most struck me in the comments on this war came from “young” Henry Kissinger who, at a green age of 99, made it clear to us that it would be better to highlight and draw upon existing differences Russia and China, rather than continue to establish Wall against wall can only have devastating effects in the future.

Going back to the tragic events of these days, these remarks reinforce my belief that only an agreement between the United States and China (their choice of potential mediators) could bring an end to this conflict, but they compel me to remember that, even in the most dangerous moments of the Cold War, the Americans and the Soviets prevented Destroy the planet by arguing with each other. Couldn’t Biden and XI Jinping do the same?

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