The greatest, potentially most dangerous Macro economic trend could be a tectonic shift in the world order of Great Powers. This has happened several times in the past 500 years.
The western alliance of the U.S. + EU + Japan has dominated the world economy and maintained peace since World War 2. But China has been rising as all METARs know. President Xi has underlined his determination of establishing an Asian-based world order of China + Russia.
The current terrorist attack on Israel by Hamas and Israel’s predictable response is a tempest in a teapot compared with the potential conflict between these massive Great Power configurations. Economic alignments might be dramatically affected over time.
China’s close ties with Russia in countering American dominance point to a geopolitical rift that could shape the conflict between Israel and Hamas.
The leaders of China and Russia hailed each other as “old” and “dear” friends. They took swipes at the United States and depicted themselves as building a “fairer, multipolar world.” And they marveled at their countries’ “deepening” trust.
China’s top leader, Xi Jinping, used a Beijing-led conference of leaders from mostly developing countries on Wednesday to showcase his ambitions to reshape the global order, as the world grapples with a war in Ukraine and a crisis in Gaza. He cast his country as an alternative to the leadership of the United States. And he gave a prominent role to President Vladimir V. Putin of Russia, underscoring how central their relationship is to Mr. Xi’s vision… [end quote]
Chinese and Russian leaders tout trillion-dollar initiative as a model for international cooperation at summit in Beijing, but Western leaders weren’t there to hear it
During a keynote speech inside Beijing’s Great Hall of the People on Wednesday, Xi positioned China as a leader of a new, more inclusive global order and promised that his country’s rise would benefit any that wanted to participate.
“We don’t do ideological confrontation, we don’t do geopolitical rivalry and we don’t do bloc politics,” he said, taking aim at unilateral sanctions, economic decoupling and other tools that Beijing accuses the U.S. of exploiting to contain its rivals. “What has been achieved in the past 10 years demonstrates that Belt and Road cooperation is on the right side of history.”…
There was no immediate word of a breakthrough on long-running negotiations for a new natural gas pipeline linking Russia and China, dubbed the Power of Siberia 2. The pipeline would traverse Mongolia and bolster Russian gas sales to China, further reorienting Russia’s energy industry toward Asia and away from its traditional reliance on Europe… [end quote]
The vast majority of U.S. financial aid to foreign countries is in the form of grants (no expectation of repayment). The vast majority of Chinese Belt and Road investments are in the form of loans, with repayment expected. Massive loans for white elephant infrastructure projects (such as big airport terminals) have burdened low income countries. According to the WSJ, B&R now appears to be shifting toward smaller, more commercially-oriented projects, as well as giving priority to clean development and bolstering digital connectivity among its members.
China has been a Great Power and the center of the world in its own estimation since the Chinese empire was founded in 228 BCE. Despite tremendous ups and downs (mostly caused by internal problems of bad leadership), China has influence the entire east Asian region for millennia. It’s hard to say whether their current real estate sector financial problems will cause an economic setback.
Amazingly, ancient writings about mercury in the tomb of the first emperor have been corroborated by soil testing.
The Chinese have been “thinking big” for 2,000 years. Don’t be surprised that they have returned to that mode since they have finally gathered significant resources.