Bern following Lei for a while now. She explains things well and frequently debunks things people consider as fact like say China's GDP.
She called it a trade war a week ago and terms it an extinction level disaster for China's export sector and the CCP
She also said the tariffs are China targeted. Targeted at the CCP's export dominance, export dumping practices and its supply chain control.
The Chinese economy is already in a traumatic downturn and export is the only sector they have going. Therefore export is key to the stability of the regime. China is effectively playing with a weak hand or its back to the wall.
China's exports to the US from their customs data make up 36% of the total surplus. But this doesn't include a lot of third countries that transhipped for China. Ironically these countries have a huge surplus with the US which is why Trump's tariffs target them. There is a common pattern of countries across the globe running a deficit with China due to dumping and balancing that deficit with surpluses from the US. Well, that is no longer possible so these countries will have to tighten their imports from China. You can see how China gets squeezed from many directions.
So the US market makes up much more of China's stated surplus and is irreplaceable.
The way the CCP bots spin this is US only makes up 15% of China's exports and losing the US market isn't a big deal. It is a big deal. A very big fcuking deal! Think 45 - 50%
To people who say prices will rise in the US. Yes, they will but let's say exporter & importer agree to split the costs instead of assuming only importer. Now the increase will be less but the exporters profits will be completely wiped out. As it is they are very low, think less than 5%. So these exporters now become fully dependent on CCP government subsidy to stay in business.
The result is a negative cycle of shrinking exports, worsening unemployment (upto 36 million), cash flow crises, weakening consumption & contracting investments. This will only aggravate China's existing problems like the property market crisis, local government debt (currency depreciation) and high household debt.
CCP has chosen a maximalist position. Typical because it means Xi cannot back down without losing face so its the other side that has to relent.
Nah! Not with Trump.
China has nowhere to go. Either China caves or the CCP is going to be overthrown. Some like
GD Bakshi are already hinting at a possible military coup. Not so outlandish is it when you understand how deadly it is for China to retaliate. A third possibility is an adventure. Taiwan (too hard), India (too hard), Philippines (US treaty partner). That leaves Vietnam.. which won't draw in the US.
Very interesting times ahead for China
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