Forecast and look ahead to the global future!

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Author: brother Mao this article is reproduced under the authorization of official account brother Mao’s vision (ID: maogeshijue).

This article has a large amount of information, so we only talk about dry goods and don’t talk nonsense. We should keep up with the rhythm when reading.

At present, the biggest problem that plagues the world is high inflation. Except for a few countries, most countries in the world are plagued by high inflation. If high inflation is not solved, the world will certainly fall into a great recession.

Global Inflation Star Array

There are two reasons for high global inflation. One is that under the impact of COVID-19, central banks around the world such as the Federal Reserve have printed too much money.

The balance sheet of the Federal Reserve before COVID-19 was US $4.2 trillion, and at the end of 2021 it was US $8.76 trillion. The scale of money printing exceeded the total of the past 40 years.

The balance sheet of the European central bank before COVID-19 was 5.2 trillion euros, and at the end of 2021 it was 8.57 trillion euros; The balance sheet of the Bank of England before COVID-19 was US $0.71 trillion, and at the end of 2021 it was about US $1 trillion.

A huge amount of money poured into the global market, leading to the crazy rise of bulk products. Take Brent oil price as an example. The lowest price in April 2020 is 6.4 dollars/barrel, and it will rise to 84 dollars/barrel by October 2021.

The second reason is the structural shortage of global energy and food caused by the Russia Ukraine war.

The main driver of the Russian Ukrainian war is the United States. In October 2021, facing the rising inflation index, the Federal Reserve’s attitude began to turn hawkish. It was precisely at this time that the crisis in eastern Ukraine began to erupt, and the Ukrainian government troops began to attack the Donbas region on a large scale, causing a large number of ethnic Russians to flee to Russia.

Russia was forced to gather more than 100000 troops on the eastern border of Ukraine to exert pressure on Ukraine.

However, under the continuous fire of the United States, the Russian Ukrainian war broke out on February 24, 2022. It was precisely in March 2022 that the Federal Reserve began to officially raise interest rates.

The logic of the United States is to create a war in Europe, allowing European safe haven funds to take orders for the American financial market during the interest rate increase cycle of the Federal Reserve.

However, the aggressive interest rate increase strategy of the Federal Reserve has greatly disturbed the global economy. The strengthening of the dollar has led to the weakening and devaluation of other currencies. It is very painful for sovereign currencies to depreciate at the same time in the context of high inflation.

Therefore, there are two key points in determining the current trend of the global economy. First, how long will the Federal Reserve continue to raise interest rates? Second, when will the Russian Ukrainian War end?

These two issues are actually closely related.

Next, we will predict the prospect of the Russian Ukrainian war from the economic perspective.

one

Anticipation of the Russian Ukrainian War

From the basic data, there is no doubt that Russia has a huge advantage over Ukraine. Here are some data.

In 2021, the GDP of Ukraine will be 195 billion US dollars, and that of Russia will be 1770 billion US dollars. The scale of Russian economy is 8.5 times that of Ukraine.

The Russia Ukraine war lasted more than half a year. Although Russia made a lot of money through energy exports (at present, Russia’s foreign exchange reserves reached 570 billion US dollars, a historical record after the collapse of the Soviet Union), the domestic manufacturing industry was destroyed by western sanctions. Therefore, the international investment banks estimate that Russia’s GDP this year will shrink by about 6% compared with 2021; The situation in Ukraine is even worse. This year’s GDP is predicted to shrink by 30-40% compared with 2021.

Let’s look at military expenditure.

According to the estimation of western think tanks, the Russian Ukrainian war has lasted more than half a year, and the estimated Russian military expenditure is about 100 billion euros. If it continues to the end of the year, it is estimated that 50 billion euros will be increased. In this way, the military expenditure of Russia in the war is 150 billion euros.

What about Ukraine? Ukraine recently released its fiscal budget for 2023. The military budget expenditure in 2023 is 29.8 billion US dollars. According to this figure, the military expenditure of Ukraine this year is also about 30 billion US dollars. This year, the West has given Ukraine roughly 20 billion US dollars of assistance (this is the figure Ukraine really got. The number of US official aid to Ukraine is very large, in fact, quite a part of it has not been given to Ukraine).

The GDP of Russia to Ukraine was 8.5 times in 2021, which should be 10 times+this year, and the military expenditure of Russia to Ukraine was 5 times.

Larger GDP means greater military potential, and more military budget means more powerful material resources on the battlefield.

This is Russia’s huge advantage over Ukraine’s comprehensive strength.

But Russia has two disadvantages.

One is that the number of people is too small. At present, the Russian army has invested about 200000 people in the Ukrainian battlefield, while the Ukrainian army is 600000.

If it is the kind of rich war fought by Americans, they can wash the ground with missiles whenever they want. In the 1991 Gulf War, the United States spent 500 billion dollars (prices in the 1990s) after more than 40 days of fighting. A large number of people is just a pile of meat.

However, Russia is bitter compared with the United States. High precision missiles are used in a number of ways. Therefore, the Russian Ukrainian war is a hybrid war fought by a small number of sophisticated weapons and traditional military equipment. Compared with the war fought by the United States, it is almost an era behind. In this case, Ukraine’s military size is three times that of Russia, which is a huge advantage.

At the beginning of the war, the Russian army had a huge appetite. More than 100000 people wanted to play a big, deep and penetrating tactic and ate half of Ukraine at once. As a result, the Ukrainian army quickly shrank in the city. Instead of being able to gnaw, Russia was knocked out of several teeth.

Therefore, later, Russia had to shrink its fists and concentrate on defeating Bath and Mariupol. The all-around attack became the key attack. Russia has lost its overall offensive capability, while Ukraine, with the assistance of the West, has been able to arm its young people to fight a war of attrition.

One is the overall backwardness of informatization and information.

This time, Ukraine launched the Kharkov counterattack, and the online supporters of Ukraine praised it, claiming that it was a classic diversion tactic.

The so-called diversion is a classical tactic, a deception tactic under the condition that the information asymmetry battlefield is not transparent. What era is it now? Which one of China, the United States and Russia does not have hundreds of military satellites in the sky every day? If you want to distract, you must transfer a large number of troops from a distance to the battlefield to complete the assembly. How can such large-scale troop and material transfer be hidden from the eyes of satellites?

Even if it is night to secretly mobilize the army can not! Today’s military satellites use microwave monitoring, which can be monitored without relying on light.

However, strange things happened in the Russian Ukrainian battlefield. Why did Ukraine gather a large number of troops in the Kharkov area to hide from the monitoring of Russian military satellites?

What does this mean?

Again, Russia is too poor! The number of Russian military satellites looks alarming because of the aging of equipment and poor maintenance due to insufficient costs, but most of them have been “off duty” for a long time.

This fatal omission was mastered by the Americans, so they were able to seize the gap between the Russian military satellites and let Ukraine complete the troop mobilization, which caught the Russian army off guard.

So the comparison between Russia and Ukraine is like this. Russia’s GDP and military expenditure are far higher than Ukraine’s, but it is at a disadvantage in the number of troops and intelligence. Therefore, it is inevitable that the Russian Ukrainian war will fall into a stalemate. Neither of Russia and Ukraine can overwhelm the other party at the moment, but can only consume the strength of the other party.

On September 20, Russia announced that the four Uedonian states would hold a referendum on joining Russia. This is Putin’s act of breaking the ice. Once the four Uedonian states are merged into Russia, Russia and the West will completely cut off the room for change.

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In addition, if the four states in eastern Ukraine become Russian territory, it not only means that Russia can mobilize volunteers to participate in the war, which to some extent solves the problem of insufficient soldiers on the Russian Ukrainian battlefield; More importantly, in the future, Ukraine’s attack on eastern Ukraine will be an “invasion” of Russia, and the war will be in danger of expanding or even losing control.

However, it must be emphasized that an important prerequisite for Ukraine to compete with Russia is the support of the West, especially the United States. Whether it is Ukraine’s war funds or battlefield intelligence, Ukraine cannot persist for a month without the support of the United States.

The reason why the United States was able to continue blood transfusion to Ukraine generously is that it must create continuous wars in Europe to attract European safe haven funds to the US financial market during the interest rate increase cycle of the Federal Reserve. Otherwise, the US financial market with a huge foam may collapse under the impact of the radical interest rate increase of the Federal Reserve.

In addition, it is interesting to note that the US military assistance to Ukraine is mainly defensive weapons.

As of September, the United States military assistance had not given Ukraine a plane, a tank or a missile with medium range or above. Obviously, the US assistance to Ukraine is to maintain a low-intensity war. In a sense, it can even be said that the US does not want Ukraine to win a decisive victory on the battlefield.

Therefore, as long as the Federal Reserve does not stop raising interest rates, the United States will continue to give blood to Ukraine, allowing the Russian Ukrainian war to continue.

How long will the Fed’s interest rate hike cycle last?

two

Prediction of the Fed’s interest rate increase cycle

According to the signal released by the Federal Reserve to the market, the current goal of the Federal Reserve is to reduce the inflation index to less than 2% at all costs, but the Federal Reserve also implies that the initial goal of the Federal Reserve is to increase the interest rate to less than 4%.

The inflation index of the United States in August was 8.3%. Although it fell back from 8.5% in July (mainly due to the decline in international crude oil prices), the core inflation index rose by 0.6%.

The core inflation index of the United States is driven by two categories, one is the rent and the other is the food price. The Federal Reserve’s interest rate increase has the greatest impact on the price of international bulk products, and has little impact on the rent and food prices. Therefore, it is absolutely not possible for the United States to reduce its inflation index in a short time.

Of course, the Federal Reserve’s interest rate hike is not without scruples. If the interest rate hike leads to economic recession (the labor market starts to have huge problems), it may also lead to the Fed’s interest rate hike stopping.

Here are two predictions.

It is optimistic that the Federal Reserve will end the interest rate raising cycle by the end of next year

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The pessimistic forecast is that the Federal Reserve may not end the interest rate increase cycle until the end of 2024. What impact will these two forecasts have on the global economy?

three

The sickle of the Federal Reserve

The US dollar index rose strongly as a result of the Federal Reserve’s interest rate increase. As of September 16, the US dollar index rose by 16%. The strong US dollar has greatly depreciated the exchange rates of other currencies around the world, including the devaluation of the euro by 20%, the devaluation of the yen by nearly 30%, the devaluation of the pound by 18%, and the devaluation of the renminbi by about 9%.

Under normal circumstances, the US dollar strength of the Federal Reserve’s interest rate increase can depress the price of international bulk products, but the United States is prone to ignite the Russia Ukraine war in the interest rate increase cycle of the Federal Reserve, which directly leads to the structural shortage of global energy, thus causing the price of international bulk products to decline.

So now most of the resource importing countries in the world are facing the situation that the price of international bulk products is at a high level and the exchange rate of their own currencies is depreciated,

The price of imported resources in almost all countries has soared due to the double ghost clapping door, which has a disastrous impact on the manufacturing industry.

For example, the devaluation of the yen against the U.S. dollar by 30% is equivalent to a 30% increase in the cost of Japanese imported raw materials (oil, natural gas, coal). However, the devaluation of the yen is equivalent to a 30% reduction in the price of Japanese products exported to the international market. That is to say, even if the price of upstream bulk products remains unchanged, the Japanese manufacturing industry will not only bear the 30% increase in the cost of raw materials, but also bear the loss of 30% reduction in the price of export products.

How many manufacturing industries can withstand the double blow of upstream price rise and downstream price reduction?

Most importantly, because of the Russian Ukrainian war, the price of upstream products is still soaring! Therefore, Japan’s upstream raw material import cost has increased by far more than 30%.

According to Japanese customs data, from January to August this year, the price of oil imported by Japan rose by 147%, the price of natural gas imported by Japan rose by 155%, the price of coal imported by Japan rose by 268%, and the cost of power generation doubled.

That is to say, the real dilemma facing Japan’s manufacturing industry is to bear a 30% drop in the price of export products when the cost of upstream raw materials of imports increases by 147% – 268% and the price of electricity doubles. This is a nightmare situation.

In this case, it is inevitable that Japan’s manufacturing capacity will shrink.

What will the shrinking capacity bring?

The result is that exports have decreased significantly, but imports are still growing because the energy price has risen too much. The combination of the two is that Japan’s import and export trade has been in deficit for 12 consecutive months.

In July this year, Japan’s trade deficit reached 1436.7 billion yen. The sharp expansion of the trade deficit made the yen continue to depreciate. Then the import cost continued to increase and the export continued to shrink, forming a vicious circle.

Of course, Japan is still relatively rich, and its foreign exchange reserves are 1.3 trillion dollars. But if we lose blood at the rate of nearly 30 billion dollars a month, we can carry this foreign exchange reserves for about three years.

Now Japan can only pray that the Federal Reserve will end the interest rate increase cycle by the end of next year. Once the interest rate increase cycle of the Federal Reserve continues to the end of 2024, the Japanese economy will have big trouble.

However, even if the Federal Reserve’s interest rate raising cycle ends at the end of next year, Japanese manufacturing industry will suffer a lot. Especially, the export of automobile manufacturing industry, the largest pillar industry, will be overtaken by China.

The Japanese manufacturing industry feels very miserable, but there is even worse, which is the European manufacturing industry.

Since this year, the exchange rate of the euro against the U.S. dollar has depreciated by about 20%, which seems a little better than the Japanese yen. However, in Europe, a war between Russia and Ukraine caused Europe to wield its sword and cut off most of Russia’s energy supply, and then the EU’s energy price has soared. Since this year, the European natural gas price has increased by five times, and the electricity price has increased by 5-10 times. Such high energy prices have caused the European manufacturing industry to mourn.

The Russian Ukrainian war has lasted for half a year, and half of the European nonferrous metals and chemical enterprises have been closed. If the Russian Ukrainian war continues for another half a year, it is estimated that the European nonferrous metals and chemical enterprises will not have even a residue left.

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In addition to these two industries that are more sensitive to energy prices, other basic industries also have a hard time.

Let’s take the steel industry as an example. The main costs of steelmaking include iron ore, coal and labor and electricity.

At present, the global price of iron ore is basically stable, but the price of coal in the international market has increased significantly. In June 2021, the price of steam coal at Newcastle Port in Australia will be 199.02 dollars/ton, and in June 2022, the price of steam coal at Newcastle Port in Australia will be 385.95 dollars/ton, up 186.53%. Considering that the exchange rate of the euro depreciates by 20% against the US dollar, the coal price obtained by European steel enterprises will rise by 20% on this basis, and then the superimposed electricity price will increase by 5 times, the cost of European steel enterprises will increase by more than 80%, and the discount will also increase by 60%.

Iron and steel enterprises are all suffering industries. Generally speaking, the gross profit is about 10%. If the cost increases by 60% and the sales price remains unchanged (regardless of exports), it means that they will bear nearly 50% of the loss. For every ton of steel sold, European iron and steel enterprises will bear 50% of the loss. How long can European iron and steel enterprises survive in this situation?

Can European steel companies raise prices substantially?

European steel enterprises can raise prices in a small amount, but it is very difficult to increase prices by 50% to cover their own losses.

Because European steel enterprises also face the competition of global steel enterprises, especially the cost of Chinese steel enterprises is far lower than that of Europe (we will talk about this later).

Steel and chemical industry are the two foundations of modern manufacturing industry. If these two basic manufacturing industries are destroyed, most of them will not survive, and the entire European industry will degenerate to the original stage of light industry (similar to the industrial status quo in Southeast Asia).

Therefore, if the interest rate increase cycle of the Federal Reserve continues to the end of next year, not only the chemical and non-ferrous metal industries in Europe will not survive, but also more than half of European steel enterprises will die, and downstream manufacturing enterprises will also be scattered everywhere. If the interest rate increase cycle of the Federal Reserve continues to the end of 2024, the European manufacturing industry may only have a little residue.

This is the double strike effect of the Federal Reserve’s radical interest rate increase during the period of high international commodity prices.

Therefore, this year, the global trade is divided into two levels. All countries whose export trade is mainly resource based products are in surplus, including Russia, oil producing countries in the Middle East, Brazil, Argentina, Chile, Canada, Australia, etc;

Countries that rely on resource imports and export mainly industrial products are in deficit, including Germany, France, Italy, Spain, Japan, South Korea, etc.

One of the exceptions is China, which not only relies heavily on the import of resources, but also exports mainly industrial products. However, China’s import and export surplus is huge!

In the first half of this year, China’s trade surplus reached 2.48 trillion yuan. It is not a big problem to reach 6 trillion yuan in the whole year. This surplus is not only twice that of 2019, but also ranks first in the world, leaving a number of countries relying on resource exports far behind.

How?

four

The Secret of China’s Surplus

First, let’s take a look at China’s resource import data released by the customs.

From January to August this year, China’s oil imports decreased by 4.7%, import prices increased by 56.3%, coal imports decreased by 14.9%, average import prices increased by 81.2%, natural gas imports decreased by 10.2%, and average import prices increased by 61.6%. The import prices of all bulk products were significantly lower than those of Japan.

Why?

Several reasons.

One is that the RMB exchange rate is relatively strong, and the depreciation rate of all currencies against the US dollar is the lowest in the world (about 9%). For this alone, our imported resources are 20% cheaper than Japan and 10% cheaper than the EU.

One is that we get a lot of cheap energy from Russia. For example, we import oil and natural gas from Russia at a discount of 70% on the international market price, but also settle in RMB (ruble), which greatly lowers the overall import price of energy.

One is that we also have a certain capacity in resources. China’s dependence on oil production capacity is 70% (30% of its own production), and on natural gas is 40% (60% of its own production). Coal can be produced by itself, and the annual import volume is less than 10% of the demand.

Not only is the price of imported resources far lower than that of the EU and Japan, but the key is that China also has a Development and Reform Commission to control the price of upstream resource products. In addition to the fact that the oil price, which is highly dependent on foreign countries, is basically in line with international standards, other coal prices and electricity prices are strictly controlled by the Development and Reform Commission.

Look at a table and list the current energy prices faced by the manufacturing industries in China, Japan and the EU.

It can be seen that, except for the price of refined oil, there is little difference. The prices of electricity, natural gas and coal are far lower than those of the EU and Japan.

When the electricity price in Japan doubled and the EU increased by 5 times+, the electricity price in China remained unchanged; When the coal price in Japan and the European Union has doubled, our domestic manufacturing industry still enjoys 20% of the coal price in the European Union and Japan.

This is the secret that manufacturing countries around the world have shrinking production capacity, while our manufacturing industry can kill the trade surplus of the four sides to record highs!

Press: it is often seen on the Internet that there are roast about China’s transfer payment system, such as what six provinces and one city feed the whole country. The evidence is that only six provinces and one city in the country make positive contributions to the central finance, and other provinces need central financial allocation to maintain.

But is that really the case?

The economically developed six provinces and one city mainly have developed manufacturing industries, which can earn a large surplus through foreign trade.

But why is our manufacturing developed?

One of the most important reasons is the low cost!

Why is the cost of manufacturing in the eastern region low?

Because underdeveloped areas not only contribute cheap migrant workers, but also provide cheap energy for the eastern region!

The coal in Shanxi and Inner Mongolia, the natural gas in the western region, the hydropower in Sichuan and Tibet, and the wind power in Xinjiang have been continuously transmitted to the east. In the case of soaring international energy prices, the National Development and Reform Commission has kept China’s coal prices far lower than international prices, and kept the electricity prices from rising at a penny!

If, I mean, if China becomes a bulk assembly like the EU, without a strong central government, then the price of energy output from the backward regions in the central and western regions will definitely be in line with international standards. After so many years of hard work, can we finally let go of a chance to make a fortune?

For example, Norway, a member of the European Union, has made a fortune in EU member states by exporting electricity and natural gas in recent years. In half a year, natural gas exports alone (with prices in line with international standards) have made a huge profit of 100 billion euros.

If this happens, the manufacturing industry in the developed eastern regions of China will sink just like that in the EU and Japan.

So——

Excerpt from a news report.

On August 16, Li Keqiang, member of the Standing Committee of the Political Bureau of the Central Committee of the Communist Party of China and Premier of the State Council, presided over a symposium for the main leaders of the economically important provincial government in Shenzhen to analyze the economic situation and put forward requirements for further economic work.

(Source: Xinhuanet)

Li Keqiang said that the total economic output of the six major economic provinces accounted for 45% of the country’s total, which is the “pillar” of national economic development. Large economic provinces should bravely take the lead and play a key supporting role in stabilizing the economy. Four coastal provinces in the six provinces have contributed more than 60% of the local governments’ net contributions to the central government’s finance, and they should complete the task of financial handover.

Why does the Prime Minister particularly emphasize that coastal provinces should complete the task of financial handover?

That’s why!

five

Dramatic scenes may appear in the future

Recently, the United States has made frequent moves against China’s manufacturing industry. First of all, a chip bill was introduced to provide huge subsidies to chip enterprises that build factories in China. Enterprises that receive subsidies are not allowed to build high-end chip factories in China.

Then an inflation bill was introduced to provide subsidies of $7500 and tax relief of $4000 to customers who bought electric vehicles, provided that vehicles must be produced in the United States (or countries that have signed free trade agreements with the United States), and that more than 40% of the raw materials for electric vehicle batteries must come from North America.

One is trying to use chip alliances to block our necks, and the other is trying to use subsidies to support electric vehicle enterprises to compete with Chinese electric vehicle enterprises. Many people are worried about this.

How to put it?

Political means can interfere with the economic society, but they will certainly not be decisive. The decisive factor is economic law.

Recently, BASF Group of Germany invested 10 billion euros in Zhanjiang, Guangdong, China, to transfer European production capacity to China. This decision was not only opposed by the German Prime Minister and the German Minister of Economy, but also voted against by minority shareholders on the BASF Board of Directors.

But what if politicians oppose it? In order to survive, enterprises must follow the economic laws. At present, China’s energy prices are the lowest and most stable in the world. BASF will eventually go bankrupt if it does not transfer its production capacity to China.

Note: In June this year, BMW invested 15 billion yuan to build a new factory in Shenyang, China, and Audi FAW invested 35 billion yuan to build a new factory in Changchun. These large investment projects were basically launched under the pressure of opposition from German politicians.

The result of decades of de industrialization in the United States is cruel. There is a serious shortage of skilled industrial workers and qualified engineers, not to mention that the harsh trade union atmosphere is quite unfriendly to enterprises. This is the fundamental reason why several presidents of the United States have made great efforts to promote the return of manufacturing industry, but nothing has been done in the end.

Trying to kill the Chinese chip and electric vehicle industry that has grown up in China’s fierce competition environment by simply throwing money away is just a wishful dream.

A speech by BYD Secretary of the Board of Friends is very classic.

If we look at the current global economic environment from another angle, we will find a very interesting phenomenon.

What is the most important thing for China to achieve sustainable development?

Of course, it is to promote the upgrading of the manufacturing industry.

Under normal circumstances, the upgrading of the manufacturing industry must go through a fierce market competition in order to get the results.

But now the sickle of the protracted Russian Ukrainian war+the Federal Reserve’s interest rate increase is precisely helping us to quickly achieve industrial upgrading!

Why?

Where is the biggest competitor of China’s industrial upgrading?

In Europe, Japan and South Korea, and Taiwan, China province of China, the United States has some high-end industries, but the proportion is not large.

As long as the Russia Ukraine war lasts for 2-3 years and the Federal Reserve raises interest rates for 2-3 years, without our help, most high-end industries in Europe, Japan and South Korea will die.

Two to three years later, it seems that our industrial upgrading will be completed as long as the products are made.

The key to defeat the enemy without fighting is the result of the assistance of the American God!

Is there anything more dramatic than this?

Note: I have written all the scripts for the future movie of industrial upgrading in China. It’s probably like this——

In a house, the Chinese army is surrounded by the American army and the troops of the gathered servant countries, Europe, Japan and South Korea, and the puppet army of Taiwan, China province of China.

Under the supervision of the United States, the subordinate troops and puppet troops launched a round of attacks, and the situation became more and more critical.

At the last moment, the head of the Chinese army made a general mobilization:

Comrades, the situation has reached the most dangerous moment. The motherland and the people are waiting for the news of our victory. Now I order you to put on bayonets and prepare for the charge!

The soldiers put on bayonets one after another, looking firm and ready to make a final fight.

The leader took a rifle with bayonet in his left hand, raised his right arm high, and shouted:

Comrades, follow me——

At this time, there was a sudden sound of machine guns outside the house, and then there was an overwhelming scream.

The head opened the door with a confused face, looked out, and was shocked.

The only thing I saw was that the Americans were carrying machine guns and shooting at the soldiers and puppet troops of the servant countries crazily. In a moment, the soldiers and puppet troops of the servant countries were everywhere, and blood flowed into rivers.

The commander and the soldiers who rushed out with bayonets were stunned.

When the Americans saw that the servants and puppet troops had been killed, they carelessly threw down their machine guns and mouthed at the bewildered Chinese army – the equipment on the ground was yours, yours, mine, but the money in the body pocket was mine!

Is there such a thing?

This, uh, deal

six

COVID-19’s fangs change the world

Former US Secretary of State Henry Kissinger published a column entitled “the COVID-19 pandemic will forever change the world order” in the US Wall Street Journal on April 3.

Kissinger pointed out in the article that COVID-19 attacks mankind on an unprecedented scale and severity, and the impact on human health may be temporary, but the political and economic turmoil it causes may last for several generations. Countries must solve the current problems on the basis of cooperation, otherwise they will face the worst results.

I think COVID-19 has changed the logic of global competition.

Before the epidemic, globalization was basically the mainstream, and everyone did what they were best at according to their comparative advantages. This was an era of competition over who did the best.

After COVID-19, the logic of competition has changed. The West wants to decouple from Russia, and the United States wants to decouple from China by uniting with the West. The trend of globalization has been reversed, and the future will be a worse era – as long as you are not worse than others, you can get results that were good in the past.

If we compare COVID-19 to a tiger in the forest, when the tiger shows its cannibal fangs, the United States looks around and sees that the Chinese have run away (dynamic clearing), and the tiger can not threaten the Chinese.

What should I do?

How can we ensure that we are not eaten by tigers?

The way for Americans is to take out their pistols and aim at their friends (EU, Japan and South Korea). The United States only needs to ensure that it can run faster than EU, Japan and South Korea.

Let the EU, Japan and South Korea be eaten by tigers. Not only can they survive, but also they can share the food heritage left in the camp. Of course, the Chinese who run away early also have a share, damn it! However, it is acceptable.

According to the data of the Ministry of Commerce, from January to August this year, the actual use of foreign capital in China was 892.7 billion yuan, up 16.4% year on year. The actual use of foreign capital in high-tech industries increased by 33.6%, including 43.1% in high-tech manufacturing and 31% in high-tech service industries.

Press: The foreign industrial capital entering China this year increased by 58.9% in South Korea, 30.3% in Germany, 26.8% in Japan and 17.2% in the UK.

Therefore, it is now the case that financial capital from Europe, Japan and South Korea is going to the United States, and industrial capital is going to China.

If the COVID-19 epidemic is prolonged and the Federal Reserve’s Scythe is superimposed, the world will probably become a two-tier center in the next few years——

The global financial center is only the United States, and the global manufacturing center is only China.

Below the two levels of center is a mass of bones.

This article is reproduced under the authorization of official account cat brother’s vision (ID: maogeshijue).

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