There is an article from Bloomberg which finally concedes the obvious economic and trade dynamic within a U.S. -vs- China confrontation. The media paradigm shift is based on new statements from Chinese Ministers admitting they cannot win a trade confrontation with U.S. President Trump.
The summary reason is simple, we have discussed it frequently:
China is a production-based economic model, they do not have the ability, or wealth, to consume their own durable goods production; they rely on exports.
The U.S. is a more balanced economy; we consume 80% of our own production. We are self-sustaining, China is not.
Without a market to sell their products, the Chinese economy cannot survive.
Conversely, China has focused so intensely on durable-goods manufacturing, their consumable goods market (food) is dependent; they cannot feed themselves. The U.S. can survive without exporting food, China cannot survive without importing food. The U.S. economy can survive without importing durable goods; the Chinese economy cannot survive without exporting durable goods. This is the unavoidable trade reality. As a consequence President Trump has all the factual leverage.
In stunning, and carefully worded economic writings, Chinese academics and economic ministers are now talking about the inherent weakness of the Red Dragon policies:
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