As we have been reporting in the Trends Journal, Beijing will no longer take orders or follow rules set by Washington. (See our 23 March article, “CHINA TELLS U.S TO FU.”

Following what we had noted, this is the front-page headline of today's Wall Street Journal – Beijing’s Message to America: We’re an Equal Now

Yes, equal now, superior later. As we have forecast, the 20th century was the American century – the 21st century will be the Chinese century. The business of China is business; the business of America is war.

CHINA’S CONSUMERS ARE SHOPPING AGAIN. After lagging the country’s manufacturing recovery for months, consumer spending in China surged in March.

The nation’s official purchasing managers index for nonmanufacturing businesses climbed from 51.4 in February to 56.3 in March, the National Bureau of Statistics reported.

Readings above 50 signal economic expansion.

The Chinese government has been working to rebalance its economy, shifting some emphasis from manufacturing exports to domestic consumption.

The purchasing managers index for manufacturing also rose last month, reaching 51.9 from February’s reading of 50.6.

CHINA CAR SALES PUT PEDAL TO METAL. Sales of passenger vehicles in China ballooned 69 percent to 5.09 million during 2021’s first quarter, with consumers’ appetite for luxury cars and electric vehicles (EVs) returning the market to pre-pandemic strength, the China Passenger Car Association (CPCA) reported.

BMW and Mercedes-Benz set new sales records during the period, with consumers taking the keys to 229,748 and 222,520 units, respectively.

For the quarter, 437,000 EVs left dealers’ lots, booking an 8-percent market share for the period.

March was Tesla’s best sales month so far in China, delivering 35,748 of its locally-assembled Model Y sedans.

In contrast, General Motors sold 780,200 vehicles, fewer than in any first quarter since 2012, not counting 2020’s pandemic-plagued period. China has been the company’s only major market outside of the U.S.

Ford’s sales edged up from 136,279 two years earlier to 153,822 for the period, reversing a long slide but still only about half the number it sold in the same period in 2016.

Foreign makers, especially of mid-market vehicles, are being squeezed by Chinese manufacturers as they rival western companies in styling and engineering.

However, China’s car market is likely to need until at least 2024 to regain its 2018 peak, when 5.67 million vehicles were sold, the CPCA predicted.

The country’s recently weak equities market has discouraged shoppers from buying high-ticket items such as new cars, analysts say.

CHINA SLASHED LENDING IN AFRICA BEFORE PANDEMIC, STUDY SHOWS. China’s loans to African nations plummeted from $28 billion in 2016 to $9.9 billion in 2018 and $7 billion in 2019, according to a report by Johns Hopkins University’s China Africa Research Initiative (CARI).

The figures mirror a late 2020 Boston University study showing that China sharply curbed lending around the world.

The cutbacks possibly reflect China’s decision that many African nations had borrowed too much, a conclusion proved true in recent months.

The International Monetary Fund recently warned the developed world to prepare for a debt crisis among emerging nations (see separate story).

In March, Ethiopia, heavily indebted to China, asked for debt relief through a G20 program for countries whose economies were crippled by the global shutdown.

The Ethiopian government stopped borrowing from commercial banks “because they have too many loans,” a Chinese official said in comments quoted by the Financial Times.

Zambia, which had borrowed heavily from China for years, became the first African country to default on its Eurobond loans this year.

Other countries struggling under hefty Chinese loans include Angola, Cameroon, Djibouti, and Kenya.

China owns about 20 percent of loans made to African nations, CARI’s data shows.

China’s loans were not made with the idea of seizing national assets in case of default, CARI director Deborah Brautigan said in comments cited by the FT.

Instead, the loans were largely intended to create markets for Chinese goods and were driven by purely commercial motives divorced from Chinese government geopolitical strategies, she said.

CHINESE SPORTING GOODS FIRMS IN STOCK-MARKET SPRINT. Share prices for Anta Sports Products and Li Ning have more than doubled over the past 12 months on the Hong Kong stock exchange.

The stock price for Anta, the world’s third-largest sporting goods company by revenue, closed at the equivalent of $16.84 on 9 April, giving it a market value of about $45 billion; rival Li Ning, started by the Olympic gymnast of the same name, closed at $7.

The two companies are third and fourth in sporting goods sales in China and, according to analysts, are the only domestic brands growing their market shares at home.

The two are bested by Nike, share prices for which grew 62 percent over the last year, and Adidas, for which the stock price gained 37 percent.

However, as we had reported, Adidas and Nike are being hammered by a Chinese consumer boycott after both spoke out against slave labor being used in the Xinjiang province’s cotton industry.

And as we noted, domestic brands have gained sales as part of a surge in Chinese national spirit sparked by the international boycott of Xinjiang’s cotton.

And the two Chinese companies also are beginning to rival Western makers in quality and innovation, the Wall Street Journal reported, which also draws domestic consumers' loyalty.

In the U.S., Anta has an endorsement deal with Klay Thompson, a Golden State Warriors guard; Li Ning has a sponsorship with Miami Heat forward Jimmy Butler.

  1. alex.c 1 year ago

    I live in Europe.
    This is my theory: The US never wanted Europe to become its own super power. It knew that if Russia and Germany ever really joined up, the US could face a superior power than itself in due time.
    And BTW, I do believe, that the US leaders needed to destabilise the Middle East to keep control of the oil, and watching millions of young men from those countries with an ideology that they knew was incompatible with European countries would destabilise Europe somewhat also, and this was a welcome side-effect.

    Meanwhile the US had not really calculated that by sending their factories to China, China was going to become a super power in its own right, much faster than expected.

    So what to do with Russia. Well it was decided by the Democrats that using Russia as the new threat for internal political reasons was the way to go. Inevitably therefore, Russia and China have formed a new anti Western block.

    And that is where we stand. I would speculate, that the pro US feelings that existed 20 years ago no longer does in Europe. Of course, Europe still cannot afford to go against the US wishes, but as America weakens, I believe that European countries are likely to increasingly turn to the sino-Russian block.

    The European people understand that China does not play fairly in trade, but China is not perceived as a threat. Puppet EU politicians still hold the line dictated by Washington when it comes to Russia. But this may not last for ever.countries like Hungary, or France with Marie le Pen are very pro-Russian.
    The people do not perceive Russia to be a threat either. (for the most part)
    Europe is undergoing a much more passionate but silent war with Islam, and the impact the migrants are beginning to have in meaningful ways.

    I can envisage a future in which Europe-Russia and China becomes a friendly trading group.
    None of these nations want War.

    I am certain that the US would not appreciate this state of affairs. And the best way to mix the cards is obviously to start a new major war. Perfect at a time when the mighty Dollar is losing its status of reserve currency.

    I felt much more confident with Trump in the white house. I do not trust the new administration to do the right thing at all.

  2. harlow53 1 year ago

    I think so, yeah
    Back in 2001 China was allowed into the world trade organization. As far as I was concerned, this was inevitable. China had become the manufacturing arm of the world. They were growing in leaps and bounds, and we were sending trillions of dollars into their economy
    Bob Rinear | April 16, 2021

    Back in 2001 China was allowed into the world trade organization. As far as I was concerned, this was inevitable. China had become the manufacturing arm of the world. They were growing in leaps and bounds, and we were sending trillions of dollars into their economy.

    As all this growth was taking place, and China looked to be part of the big boy club, it was quite evident to me that “at some point” they didn’t just want to be the planets labor system. They wanted a seat at the upper echelons of high finance.

    As time moved forward, this played out, as they petitioned to be part of the IMF’s “SDR” system. What’s that you ask? The SDR is an international reserve asset created by the IMF in 1969 to supplement its member countries’ official reserves. From 1969 to 2000, the SDR “basket” was three currencies. The US Dollar, the Japanese Yen, the Pound Sterling. Then the Euro, which was created in 1999 was added.

    Well, in the years 2009,10,11,12 etc, I was on record many times saying that not only is China petitioning to be part of this reserve asset, they would gain acceptance. That happened in 2015. I got it right. The following is from the IMF itself:

    The RMB’s inclusion is an important milestone in the integration of the Chinese economy into the global financial system. The IMF’s determination that the RMB is freely usable reflects China’s expanding role in global trade and the substantial increase in the international use and trading of the renminbi. It also recognizes the progress made in reforms to China’s monetary, foreign exchange, and financial systems and acknowledges the advances made in liberalizing, integrating, and improving the infrastructure of its financial markets. We expect that the inclusion of the RMB in the SDR basket will further support the already increasing use and trading of the RMB internationally.

    In addition, while data disclosure is not a formal criterion for a currency’s inclusion in the SDR basket, issuers of reserve currencies generally meet high transparency standards. The Chinese authorities have recently taken welcome steps to increase data disclosure and enhance their commitment to multilateral data initiatives; for instance, reporting the currency composition of reserves to the IMF. Also, the Chinese authorities continue to work with the Bank for International Settlements on their reporting of the Chinese banking sector statistics. These developments will lead to increased acceptance of the RMB among official holders of foreign exchange reserves.

    So, China got its entry into the big boy club. But there was something else brewing that was never really reported by the main stream press, nor on such outfits like CNBC. China was gobbling up gold like it was going out of style. How many times did I write something along the lines of – “The Chinese culture is thousands of years old and they’re not stupid people. If they’re buying tons of this yellow stuff, I think I need a bunch too.”

    For years China bought tons and tons and tons of gold. For what? Looking back at their ambitions, it became clear to me. From the WTO in 2001, to being in the SDR at 2015, my guess was that the next step was a gold backed Yuan.

    Why would they want that? Well think about it. They make “stuff” from refrigerators, to stoves, air conditioners to dishwasher, from nuts and bolts and steel rod, to everything under the sun. And when they ship it around the world, how do they get paid? Mostly by US dollars.

    Well think about it like they do. They take human labor and they dig for materials, they build plants, they employ workers, they produce product. And after all of that, they’re paid in a currency DESIGNED by the Federal reserve to lose a minimum of 2% per year in value.

    That’s right folks. When you hear that lunatic Jay Powell talking about trying to hit their inflation target they always say they want 2% per year. Now, ONLY a banker can make you think that devaluing your money by 2+% a year is a good thing! No, idiots, it’s not a good thing. NO inflation/devaluation is a good thing.A very good thing. But that’s not how the system is designed.

    A dollar in your pocket buys what FOUR CENTS bought in 1915. If you’re a psychopathic demonic Federal reserve member, you tell people that this is a good thing. How they do that with a straight face is beyond my comprehension. It’s NOT a good thing. It leads to all sorts of issues like wage/price spirals and what have you.

    Well I tend to think the Chinese know this. And it’s been my guess for a long time that it would be them, the Chinese that tried to bring some stability to their money, by backing it with a percentage of Gold.

    But they’ve got a problem. They hold over a trillion in dollar reserves and trillions more in dollar-based assets. While they’d love to be out from under the weight of having the “US dollar” being the world’s reserve currency, they have to make their transferal to be as painless as possible.

    On Friday, Zero hedge ran an article about this very topic. In fact this was the Headline:

    Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion

    Well I’ve been saying this since 2009, that yeah, China has been preparing the way for a gold backed currency for over 20 years. They’ve accumulated tonnages that we don’t even know about. Don’t forget, they aren’t the most forthright when it comes to reporting and most people familiar with them say that China doesn’t have just the 2000 or 3000 tonnes they say they have, they have more like 25 – 30K tons. And, they’re buying more.

    However, as I’ve said, they can’t just pull the plug on the Dollar. The crash in their own country would be mammoth. So many of their infrastructure, and raw materials gathering companies, production companies, etc, have been enabled with dollar denominated loans that a sudden crash in the dollar would destabilize them for months into years.

    So, this is going to take time. It’s already been 12 years since I first mentioned this concept of a gold backed Yuan, and it might take 12 more. The Chinese are patient folks, they think in terms of decades, not months.

    If I had a point to all this, it is simply this. Many are in the belief that gold is dead and Bitcoin, Doge coin, Etherium and what ever else digital crypto madness is out there, is the future. Yet China HAS a central bank issued digital currency right this very moment. Yet they’re buying Gold by the billions. Why is that?

    Gold is not dead. Watch the Chinese and copy them. Buy some, even if it’s just an ounce or two. It can’t be worthless ever. I can’t say that about US dollars. Just sayin

    Sent from my iPad

  3. Eagle11 1 year ago

    Good point that China is loading up on gold bullion(again) even though they have a digital currency in the final stages of development.

    However, wouldn’t the central banks’ reasons for accumulated gold be different than an individual’s reasons for doing so? China likely wants to gain worldwide credibility with their yuan (RMB) and that is accomplished with gold. If I’m not mistaken they used gold to give credibility to launching an oil futures trading exchange in Shanghai some years ago.

    Still, point well taken. China, Poland, India Hungary et al, are not accumulating cryptocurrencies but gold for a reason.

    Why do I never hear/read about the US doing likewise? Are we accumulating and it’s a secret for some reason or are we hell-bent on self destruction?

  4. lvblasiotti 1 year ago

    China not only wants to gain worldwide credibility with their yuan (RMB) and their gold……..they want to control the entire world and impose their government controlled tyranny on U.S.

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